In the first quarter of FY24, IDBI Bank achieved its highest ever standalone quarterly net profit, reaching ₹1,224 crore. This remarkable performance was fueled by robust growth in net interest income, and the bank's asset quality also improved, thanks to accelerated provisioning. The net profit for this reporting quarter saw a significant increase of 62 percent compared to the same period last year, where it was ₹756 crore. The net interest income showed substantial growth as well, rising by 61 percent year-on-year to ₹3,998 crore, compared to ₹2,488 crore in the corresponding period of the previous year.

However, other income, which includes fees earned from customer services, commission income from non-fund-based banking activities, profit/loss from sale of investments, and recoveries from written-off advances, experienced a decline of 25 percent year-on-year, amounting to ₹852 crore in this quarter as opposed to ₹1,140 crore in the same quarter of the previous year. This decrease can be attributed to the absence of one-time inflows, totaling ₹215 crore, which were received in the year-ago quarter but not in the reporting quarter.

During this quarter, the bank made an additional provision of ₹770 crore on non-performing assets (NPAs), exceeding the rates prescribed by RBI. The decision was based on the management's assessment of the impairment in various categories of advances. There was an increase of ₹581 crore in assets becoming first-time NPAs and an increase of ₹51 crore in existing NPAs during this quarter. To support the accelerated provisioning, the bank utilized a portion of the recoveries, amounting to approximately ₹1,600 crore, made during the reporting quarter.

The net interest margin (NIM) experienced a substantial increase to 5.80 percent (taking into account the recovery proceeds) from 4.02 percent in the year-ago quarter. The core NIM also rose to 3.94 percent from 3.26 percent.

In terms of asset quality, the bank witnessed positive improvements. The gross non-performing assets (NPAs) to gross advances ratio improved to 5.05 percent as of June-end 2023 compared to 6.38 percent as of March-end 2023. Similarly, the net NPA to net advances ratio also improved to 0.44 percent as of June-end 2023, down from 0.92 percent as of March-end 2023.

The bank's net advances grew by 20 percent year-on-year, amounting to ₹1,65,403 crore as of June-end 2023, as opposed to ₹1,38,223 crore as of June 30, 2022. Deposits also saw an increase of about 9 percent year-on-year, reaching ₹2,44,971 crore compared to ₹2,25,269 crore.

Furthermore, the bank has taken proactive measures to clean up its balance sheet. It identified approximately 10 stressed accounts totaling around ₹5,000 crore for transfer to the National Asset Reconstruction Company Ltd. Jayakumar S Pillai, Deputy Managing Director, highlighted this initiative as part of the bank's efforts to enhance its financial health.