Rise in fee-based income, NII lifts IDBI Bank Q4 net profit

Sat. April 25, 2009; Posted: 09:26 AM

Mumbai, Apr 24, 2009 (Asia Pulse Data Source via COMTEX) -- IDBNF | Quote | Chart | News | PowerRating -- Buoyed by a strong growth in its fee-based and net interest income, state-run IDBI Bank clocked 28 per cent jump in its net profit for the fourth quarter ended March 31, 2009.

Besides, the bank today said it will set up a separate subsidiary for foraying into mutual funds business shortly.

Net profit grew to Rs 314 crore during the quarter from Rs 245 crore in the year-ago period. Total income rose to Rs 3,734 crore compared to Rs 2,647 crore.

The bank has decided to focus on enhancing the quality of its balance sheet rather than merely expanding the volume, besides growing its fee-based income, IDBI Bank's Chairman and Managing Director Yogesh Agarwal told reporters here.

"We would like to be judged not only by the volume (of the balance sheet) but also by the quality of the book," Agarwal said.

IDBI Bank's net interest income (NII) stood at Rs 481 crore for the quarter against Rs 241 crore in the corresponding period quarter in last year.

IDBI Bank has a total deposit-base of Rs 1,12,401 crore, up 54 per cent from Rs 72,998 crore in the year-ago period. Total advances of the lender grew to Rs 1,03,428 crore, up 26 per cent from Rs 82,213 crore.

IDBI Bank plans to set up a separate subsidiary for mutual funds business shortly and expects to finalise the structure of the company in the near future. "We have received the approval to set up an MF subsidiary. The modalities are being worked out. We hope to finalise the structure of the company in the next one month," Bank's Deputy Managing Director Jitendar Balakrishnan said.

During the period, IDBI Bank has brought down its gross non-performing assets (NPA) to 1.38 per cent (1.87 per cent) and restructured 82 accounts worth Rs 3,000 crore, Agarwal said. Net NPAs of the bank stands at 0.92 per cent.

The lender has received a total 127 restructuring applications worth Rs 8,671 crore and is presently considering the remaining proposals, Agarwal said.

IDBI Bank has provided Rs 10 crore for the restructured assets, while the total provisioning for the quarter stood at Rs 170 crore against Rs 79 crore in the year-ago period.

For the financial year ended March 2009, IDBI Bank reported a net profit of Rs 859 crore, up 17.83 per cent, compared to Rs 729 crore in the last fiscal.

Total income rose to Rs 13,022 crore during FY 09, from Rs 9,622 crore in the last fiscal. IDBI Bank has a capital adequacy ratio of 11.57 per cent as on March 31.

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