Makes a strong pitch for exiting PCA restrictions; asset quality improves
IDBI Bank has reported a net profit of ₹135 crore for the quarter ended March 31, 2020 compared to with a net loss of ₹4,918 crore in the year-earlier period.
The lender posted a net profit after a gap of 13 quarters as additions to non-performing assets fell sharply during the quarter.
“First time NPAs reduced to ₹727 crore in Q4-2020 from the ₹1,781 crore in Q4-2019,” the bank said.
“The profit would have been higher but for the recoveries which were adversely affected during March due to COVID-19 impact,” said Rakesh Sharma, MD & CEO, IDBI Bank in an interaction with the media.
The net NPA ratio improved to 4.19% as on March 31, 2020 against 10.11% as on March 31, 2019 and 5.25% as on December 31, 2019. The gross NPA ratio stood at 27.53% as on March 31, 2020 against 27.47% as on March 31, 2019 and 28.72% as on December 31, 2019.
“All the parameters have shown improvement. Net NPAs have also come down and aging provisions are evenly spread so that there is no extra burden,” he said.
Tier 1 capital and capital adequacy ratio (CAR), which was at 10.57% and 13.31% respectively as on March 31, 2020, have improved as against 9.14% and 11.58% as on March 31, 2019.
“The bank has achieved all PCA parameters for exit, except RoA,” the lender said.
While there is an overall write-back in provision of ₹1,511 crore during the quarter compared with the ₹7,233 crore provided during the fourth quarter of the previous year, a ₹247-crore provision was made against standard assets as per Reserve Bank of India (RBI) norms for moratorium accounts which are in default.
While the central bank had allowed the lenders to make the provision in two quarters, IDBI Bank had made the entire provision in the January-March quarter.
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