IDFC Posts Loss In Sept Quarter Due To One-Time Provision
Chirag Gothi / 02 Nov 2015
IDFC shares fell as much as 7 per cent on Monday as its losses soared in the second quarter due to one-time provision of Rs 2,500 crore on stressed assets from accumulated reserves in order to clean up its books following the de-merger of its banking arm - IDFC Bank - from the holding company. The company reported consolidated net loss of Rs 1468.83 crore in Q2 September 2015 compared with net profit of Rs 421.40 crore in Q2 September 2014.
IDFC shares fell as much as 7 per cent on Monday as its losses soared in the second quarter. The company reported consolidated net loss of Rs 1468.83 crore in Q2 September 2015 compared with net profit of Rs 421.40 crore in Q2 September 2014. The result was announced on Saturday, 31 October 2015. Its net interest income (NII) in Q2 fell to Rs 1057.6 crore against Rs 1098 crore year-on-year.
The infra lender created a one-time provision of Rs 2,500 crore on stressed assets from accumulated reserves in order to clean up its books following the de-merger of its banking arm - IDFC Bank - from the holding company. IDFC also reversed unrealised interest of Rs 138 crore on stressed assets, which it had booked earlier.
On a standalone basis, it registered a net loss of Rs 1411.1 crore in Q2FY16 from a net profit of Rs 470.1 crore in Q2FY15. It incurred one-time loss at Rs 2639 crore on one time provision. Its NII also slipped to Rs 1001.6 crore versus Rs 1036.5 crore in Q2FY15.
The finance company's asset quality took a beating in September quarter as gross non-performing assests (NPA) was at 3.17 per cent against 1.52 per cent while net NPA (QoQ) came in at 1 per cent from 0.99 per cent Q-o-Q. In absolute terms, gross NPA rose to Rs 1,467.3 crore from Rs 810.6 crore sequentially.
The capital adequacy ratio as on September 30, 2015 came down on account of an investment of Rs 8,785 crore in shares of its wholly-owned subsidiary, IDFC FHCL, the company said, adding that post-de-merger, the company's main business will involve investment activities.
As per the scheme of de-merger approved by the Chennai High Court, the shareholders of IDFC as on the record date i.e. 5 October 2015 have received an equivalent number of IDFC Bank shares free of cost. IDFC shares are now trading ex-bank and IDFC Bank shares are expected to list and trade on 6 November 2015, IDFC said.
After opening with a negative gap down in early trades, IDFC shares price did manage to recover and currently the stock was down only 1.36 per cent at Rs 58 on the BSE.
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