IDBI Bank stock gained after its June quarter profit jumped 78.3 percent, and the pace of bad loan growth slowed.
Net profit rose to Rs 241 crore from Rs 135.2 crore in the April-June quarter last year, as per the company's filing on the Bombay Stock Exchange. The government owned bank's performance was boosted by a tax write back.
Bank has recognised Deferred Tax Asset (DTA), which includes Rs 1,225 crore in respect of the provision on such standard assets, which inter alia include restructured standard assets and other advances that have been allowed to be classified as standard assets by RBI.IDBI Bank's Press Release
Net interest income jumped 14.2 percent to Rs 1,706.5 crore from Rs 1,494.3 crore. This increase was driven mostly by a decline in interest expenditure, as interest income remained flat on a year-on-year basis.
Asset quality worsened with gross bad loans rising to 11.92 percent from 10.98 on a quarter-on-quarter basis. But the pace of rise in bad loans slowed compared to the previous two quarters. Net non performing assets increased to 7.47 percent from 6.78 percent over the quarter.
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Provisions for bad loans fell 45.3 percent to Rs 2,432.2 crore in the quarter, from Rs 4,450.2 crore in the previous quarter. Provision coverage ratio stood at 56.14 percent at the end of the June quarter, the filing added.
The stock rose as much as 3.1 percent to Rs 68.9 post the announcement of the earnings.
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