IDBI reports largest quarterly loss by Indian bank at Rs 2,184 crore

MUMBAI: Saddled with bad loans, IDBI Bank suffered a loss of Rs 2,184 crore for the three months ended December 31, the highest ever reported by an Indian bank for a quarter.

The record loss from IDBI Bank comes after state-owned Indian Overseas Bank and Bank of India also reported huge losses — Rs 1,425 crore and Rs 1,510 crore, respectively — for the past quarter. A year earlier, IDBI Bank had posted a net profit of Rs 102.7 crore. Addressing the media after the bank’s board meeting, Chief Executive Kishor Kharat cited the asset quality review (AQR) undertaken by the central bank for higher bad loans.

The review had necessitated most banks to make accelerated provisions on stressed loans. IDBI Bank’s provisions for bad loans tripled to Rs 3,302 crore in the December quarter as its fresh stock of bad loans rose. In past quarter alone, slippage or new non-performing loans touched Rs 5,800 crore. "Half of the new NPAs are due to AQR. After this clean-up exercise, health of our bank will improve. We have also done some accelerated provisions on our own," Kharat said.

Its gross non-performing assets stood at Rs 19,615 crore, or 8.9 per cent of total loans.

The gross NPA along with restructured loans of the bank were close to 16 per cent of the loan book. Giving the outlook for fourth quarter, Kharat said: "The pain may be a little less".

He said the bank will continue to raise capital via a qualified institutional placement and selling some non-core assets to raise capital, he added. Net interest income rose 9 per cent to Rs 1,556 crore while non-interest income fell 25 per cent to Rs 578 crore.