IDBI Bank Q2 Review: State-owned banks gross NPA may improve by end of this fiscal - Heres why?
Life Insurance Corporation of India-backed banks gross NPA is to be around 12 per cent by the end of this year, the research report said.
State-owned IDBI Bank’s gross non-performing assets (NPA) is expected to be down by 4 per cent by the end of this current fiscal as the certain bad accounts will be transferred to NARCL (National Asset Reconstruction Company Limited), Zee Business research report said.
According to Zee Business research, “Gross NPA of IDBI Bank is expected to be down by 4 per cent by this transfer around March 2023, Rs 6,000-7,000 crore will be recovered of these accounts which’s actual value is estimated to be around Rs 11,000 crore.”
Life Insurance Corporation of India-backed bank’s gross NPA is to be around 12 per cent by the end of this year, the research report said.
Result-wise, the cost of deposit reduced by 16 basis points (bps) to 3.44 per cent and the cost of funds was also reduced by 16 bps to 3.72 per cent in Q2, Zee Business research said.
On the valuation, the questions related to the disinvestment of the bank will be answered Department of Investment and Public Asset Management (DIPAM) or KPMG.
IDBI is to bring down its stake in NSDL from 26 to 15 percent by March 2024 because of regulatory conditions.
IDBI Bank has come out with its best-ever quarterly numbers on Friday, logging in a 46 percent growth in net income at Rs 828 crore for the September quarter.
The bad loan ratio -- improved massively with net NPA falling 56 bps annually and 10 bps sequentially to 1.15 per cent as against its target of 1.25 percent for the full year. Gross NPAs fell to 16.51 per cent.
"I am very sure that we will have no negative surprises on any of these fronts but will definitely have many positive surprises as we close the year," Rakesh Sharma, the bank's Managing Director, and Chief Executive Officer, said.
Earlier this month, the government on Friday invited bids for privatising IDBI Bank and said that it together with LIC will sell a total of 60.72 per cent stake in the financial institution.
The Department of Investment and Public Asset Management (DIPAM), while inviting Expressions of Interest (EoI), said that the potential investor should have a minimum net worth of Rs 22,500 crore, must report net profit in three out of the past five years to be eligible for bidding for IDBI Bank.
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