March quarter result: IDBI Bank posts Rs 5,663-crore loss

Provisions more than doubled to Rs 10,773 crore compared to Rs 3,637.5 crore at the end of the December quarter. In the March 2017 quarter, the bank had set aside Rs 6,209 crore as provisions. The bank’s performance may have been worse if it had not used special dispensations permitted by the regulator. It has reduced provisions by Rs 1,496 crore after the RBI allowed banks to reduce mandatory provisions against accounts referred to the NCLT to 40 per cent from 50 per cent earlier. The bank has also chosen to spread the provision for mark-to-market losses incurred on it bond portfolio.

In addition to the asset quality pain in the current financial year, the bank reported a large divergence in the assessment of NPAs between the lender and the regulator in FY2017. The divergence in gross NPAs stood at Rs 10,281.9 crore or 23 per cent of the gross NPAs reported by the bank at the end of March 2017. It also reported a divergence in provisions of Rs 4,464 crore for FY17.

IDBI Bank Chief Executive Officer M K Jain said most of the legacy issues on asset quality have been recognised. Around Rs 9,700 crore of loans slipped to non-performing assets due to the RBI’s latest circular. While slippages during the quarter stood at Rs 12,800 crore, Rs 9,800 crore in slippages were on account of the RBI’s new stressed asset framework. The bank has placed loans worth Rs 14,000 crore under the watchlist for FY19. “As part of strategy, the board has approved to sell Rs 21,397 crore worth of NPA book to be put out on sale consisting of 30 large accounts,” Jain said.

Last week, SBI had posted a record standalone net loss of Rs 7,718 crore in the fourth quarter ended March 2018 as against a profit of Rs 2,814 crore in the same period of last year. Scam hit Punjab National Bank had reported a loss of Rs 13,417 crore for the fourth quarter ended March 2018 on account of the fraud allegedly carried out by jewellery designer Nirav Modi and associates.