In the year-ago period, net profit was ‘567 crore.
The bank‘s loan book expanded 17% to ‘1.46 lakh crore due to growth in both retail and corporate segments. Net interest income (NII) increased 48% to ‘2,738 crore from ‘1,854 crore a year ago.
Lower cost of funds due to an improvement in the ratio of current and savings accounts deposits and a fall in bulk deposits helped improve margins. Cost of funds reduced 16 basis points to 3.72% in September 2022, from 3.88% a year ago. One basis point is 0.01 percentage point.
The strong loan growth and lower cost of funds helped push up net interest margin (NIM), which improved to 4.37% from 3.02% at the end of September last year. CEO Rakesh Sharma said the bank expects to maintain its NIM above 3.25% for the fiscal and a strong loan growth means advances could now grow at a faster 15% rate, compared with the 10% to 12% rate expected by the bank at the start of the fiscal.
“We now do not expect any negative surprises. If anything, the surprises will only be pleasant. I can confidently say that our performance will only improve from here on. We are seeing growth in both corporate as well as retail loans and our provisions are also among the highest in the industry, so we are very well placed,” Sharma said.
IDBI Bank expects to keep its retail to corporate balance at 60:40. It has also earmarked ‘11,000 crore of non-performing assets (NPAs) for sale to the National Asset Reconstruction Co (NARCL), which will reduce gross NPAs to 12% of loans from 16.51% at the end of September. The bank has a provision coverage ratio of close to 98%.