IDBI Bank Ltd shares jumped over 4% in intra-day trade on Monday, i.e. 11 November, after the lender over the weekend said that its net loss has narrowed down in the second quarter ended September (Q2).
At 10:55 am, shares of IDBI Bank were trading at Rs 33.70, up 2%, after hitting the day’s high of Rs 34.45. Notably, the stock has corrected by 44% in the last one year.
IDBI Bank managed to trim its losses in the September quarter to Rs 3,458.8 crore from Rs 3,602.5 crore in the same period a year ago due to higher net interest income (NII) and other income.
The bank’s NII during the quarter grew by a healthy 25.4% to Rs 1,631.4 crore over a year ago, while other income also rose 28.08% to Rs 1,032.66 crore during the period. However, the Q2 loan book declined 16% year-on-year, while deposits also were down by 1.86%.
Provisions and contingencies slipped to Rs 5,641.32 crore in the September quarter, down 10.9% sequentially and 14.3% when compared with a year ago.
IDBI Bank also informed that its board on 8 November had approved the proposal for sale of its entire stake in IDBI Asset Management and IDBI Mutual Fund Trustee Company.
To recall, the Reserve Bank of India had put the Life Insurance of Corporation-controlled bank under prompt corrective action (PCA) over a year back. While announcing Q2 results, managing director and chief executive Rakesh Sharma said: “As on date, we are complying with all the guidelines, which can take us out of the PCA, except for profitability. Capital adequacy, leverage and net NPA ratio is all complied with. We will now request the regulator to take us out of the PCA.”
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