How did you find the quarterly results of IDBI Bank for the Dec-20 quarter?

If you leave out the concerns on loan quality in this quarter, IDBI Bank actually got a step closer to exiting PCA after it posted net profits for the fourth consecutive quarter. IDBI Q3 net profit came in at Rs.399 crore after reporting a massive loss in Dec-19 quarter. However, top line revenues fell by 4.5% in the Dec-20 quarter to Rs.5,988 crore.

If you look at the various revenue verticals, then the revenues were lower across all the key verticals including retail banking, corporate banking and treasury. Despite that, the bank gained from a fall in interest costs. Operating profits, consequently, improved due to the 20% fall in interest costs from a level of 20.78% to 27.87%.

Even as the bank has turned around and ready to get out of PCA, the concern for IDBI Bank remains on the asset quality front with gross NPAs at 23.5%. However, 95% is provisioned so incremental risk is limited. With capital adequacy just about sufficient, the big challenge for the banks now will be have adequate capital to expand the asset book.