August 14, 2017
IDBI Bank, one of the largest public sector banks in the country, reported net losses of Rs.853 crore in the quarter that ended in June, 2017. The bank made a profit of Rs.241.10 crore in the same quarter last year. However, it faced massive losses in the last quarter as its share of bad loans increased exponentially.
IDBI Bank’s total share of bad loans rose to 24.11% of its gross assets, thus becoming the lender with the highest bad loan ratio, replacing Indian Overseas Bank (IOB) whose gross NPA ratio is 23.6%. The bank’s bad loans now amount to Rs.29,579 crore, an increase of 82% from last year. For the last quarter of FY17, IDBI bank incurred losses of Rs.3,200 crore, as reported by the Times of India.
The loan book of the bank reduced to Rs.1.87 lakh crore, a decrease of 14% from Rs 2.17 lakh crore in the Q1 of FY16. Total deposits of the bank also decreased by 4% to Rs.2.43 lakh crore from Rs 2.54 lakh crore in FY16. However, its low-cost savings and current deposits increased by 25.93% to Rs 81,837 crore from Rs 64,895 crore as on June 2016.
In the first quarter of this fiscal year, the IDBI Bank recovered Rs.1,492 crore worth of bad loans, an as reported by data presented on its website. In the same quarter, the bank also wrote off Rs.825 crore worth of bad loans.
IDBI Bank has been struggling with non-performing assets (NPAs) for a while now and is under the purview of the Reserve Bank of India’s (RBI) prompt corrective action (PCA) to improve its financial health. RBI implements this action plan when any bank does not meet regulatory requirements pertaining to return on asset, minimum capital and quantum of NPAs.