Net profit increased to Rs 756 crore in the quarter from Rs 603 crore a year ago, led by a 12% expansion in loans. Provisions fell 43% to Rs 1,295 crore from 2,265 crore a year earlier.
Both net interest income (NII) and non-interest income fell on the receding impact of large one-offs, such as income tax refunds, bad loan recoveries and profits from treasury operations. Adjusting for the one-offs this year as well as last year, NII increased 17% to Rs 2,021 crore from Rs 1,727 crore last year, CFO P Sitaram said.
Total recoveries for the bank were lower at Rs 1,136 crore, compared with Rs 1,600 crore last year. Unlike last year, there were no large recoveries from accounts such as Kingfisher and Videocon. Total recoveries this year included one from wind energy company Suzlon, which had refinanced its bank loans through Rural Electrification Corp and the Indian Renewable Energy Development Agency.
IDBI also made Rs 141 crore by selling its stake in bad loan aggregator Arcil.
CEO Rakesh Sharma said the bank now expects credit costs for the fiscal to reduce to 1% of loans from 1.25% guided earlier as the pace of slippages has fallen and the quality of the loan book has improved.
“Total slippages are down to Rs 964 crore this year from Rs 1,332 crore a year ago. Our corporate loan book now consists of more than 70% loans above the A category compared to 50% a year ago. Hence, we are confident of keeping credit costs below 1%,” he said.
The bank’s net NPA reduced to 1.25% from 1.67% a year ago. It is carrying provision for 97.7% of its NPAs and has set a bad loan recovery target of Rs 4,000 crore for the fiscal.
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