IDBI Bank Net Profit Dip By 6.5%

IDBI Bank, a new generation public sector bank posted subdued set of numbers for its fourth quarter of FY14. Net profit of the bank fell by 6.5% on yearly basis to Rs 518.23 crore for Q4FY14. This fall in the net profit was primarily led by higher provisions and other expenses. Provisions & contingencies of the bank have increased by 37.9% on yearly basis and 16% on sequential basis to Rs 1198.5 crore for Q4FY14. Other expenses of the bank has also increased by 12.5% on yearly basis and stood at Rs 516.52 crore for Q4FY14. However, bank saw a sharp decline in its employee cost by 32.8% on yearly basis. 

Income part of the bank has witnessed a modest increase with net interest income (NII) increasing by 9.3% on yearly basis. While other income of the bank, which forms around 15% of total income, has increased marginally by 0.4% on yearly basis. 

The asset quality of the bank has seen an improvement on quarterly basis but has deteriorated on yearly basis. Gross non-performing assets (NPA) of the bank have fallen by 1% on quarterly basis to Rs 9960.16 crore for Q4FY14 whereas net NPAs of the bank have fallen by 6% in the same period.

Even as percentage of gross advances and net advances it has declined by 54 basis points and 45 basis points respectively.

The board of directors of the bank has recommended a dividend of Rs 0.275 per share for FY14.

Currently shares of the bank are trading at price to book value of 0.43, and is fairly valued looking at the current financial performance of the bank.