IDBI H1 net up 21% to Rs. 290 crore, IDBI reports Q2 net profit of Rs. 139 crore

Highlights of H1 FY07 financial results:

- Net profit up by 21% at Rs. 290 crore
- Net Interest Income up at Rs. 233 crore
- Business up 32% to Rs. 85,262 crore
- Deposits increase by 71% to Rs. 30,953 crore
- Advances up by 17% at Rs. 54,309 crore
- Gross NPAs down to 2.31% from 4.36% as of September-end 2005
- Total assets grow by 11% to Rs. 90,235 crore

Highlights of Q2 FY07 financial results:
- Net profit moves up to Rs. 139 crore
- Net Interest Income up at Rs. 135 crore

Profitability:

IDBI reported an increase of 5.7% in net profit to Rs. 139 crore for the quarter ended September 30, 2006, as against Rs. 132 crore in the corresponding quarter last year.

Operating profit rose by nearly 7% to Rs. 133 crore in the reporting quarter as against Rs. 125 crore in the corresponding quarter last year.

In the half-year ended September 30, 2006, IDBI reported a net profit of Rs.290 crore as against Rs. 240 crore in the corresponding period last year, reflecting an increase of 21%.

Operating profit during this period increased by over 15% to Rs. 325 crore as against Rs. 283 crore in the first half of FY 2005-06.

Net Interest Income (NII) for the half-year under reference improved by 418% at Rs. 233 crore over the corresponding half-year of the previous year. NII for Q2FY07 at Rs. 135 Crore also showed a healthy improvement over Rs. 97 crore obtaining during Q1 FY07 and minus Rs. 45 Crore during Q2 FY06.

The Bank continued to maintain a high overhead efficiency ratio of 124% in H1FY07.

Business:

As of September 30, 2006, IDBI’s total business (deposits and advances) stood at Rs 85,262 crore as against Rs 64,571 crore as of September 30, 2005, registering a growth of 32%.

Deposits increased by a robust 71% to Rs. 30,953 crore (Rs. 18,158 crore as of September-end 2005). Low-cost current account and savings account (CASA) deposits now account for 25% of total deposits.

Advances increased by over 17% to Rs. 54,309 crore as compared to Rs. 46413 crore as at end-September 2005.

Retail assets surged by Rs. 850 crore in the reporting H1 FY07 to above Rs.9500 crore. Retail assets now constitute over 17% of total advances as against 16% as of March-end 2006.

As of September-end 2006, aggregate assets stood at Rs. 90,235 crore as against Rs. 81,555 crore same time last year, registering a growth of 11%.

Cost of funds:

In a rising interest rate regime, the Bank managed to pare its cost of funds to 6.66% in the reporting period as against 7.19% in the corresponding period of last year.

CAR

IDBI continued to maintain a sound capital base as indicated by its capital adequacy ratio (CAR). As against the stipulated RBI norm of 9%, the bank's CAR stood at 14.66% (Tier-I: 11.73%) as of September-end 2006. The bank’s CAR at end-June 2006 was 14.00% (Tier-I: 11.44%). This provides significant headroom for further growing the business.

Significant Developments during July-September 2006:

• The Government, by a notification dated September 30, 2006, conveyed its approval of the amalgamation of erstwhile United Western Bank (UWB) with IDBI, with effect from October 3, 2006. From the effective date itself, it has been 'business as usual' at all the branches of the erstwhile UWB. It would operate, for the present, as a Special Business Unit (SBU) of the Bank.
• Following the amalgamation of erstwhile UWB into IDBI, the Bank's delivery channels now comprise 430 branches, 18 Extension Counters and 503 ATMs spread across 150 centers. Further, the acquisition of UWB would, inter alia, help grow IDBI's low-cost CASA deposit base and priority sector business volumes.
• IDBI, Federal Bank and Fortis signed a Memorandum of Understanding (MoU) for formation of a Life Insurance Company in India. IDBI and Fortis stated earlier that they were jointly seeking a third partner to pursue the Life Insurance business. IDBI and Fortis have now jointly identified Federal Bank as the third partner. The proposed Life Insurance Company will initially be 48% owned by IDBI, 26% by Federal Bank and 26% by Fortis.
• IDBI has bagged two 'special awards', in the "Best Internet Bank for Corporate Customers" and "IT Team of the Year" categories, respectively, for the year 2005-06 from the prestigious Institute for Development and Research in Banking Technology (IDRBT), in recognition of its customercentric IT initiatives.

Source : Equity Bulls

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