IDBI Bank shares strategy for its business growth

IDBI Bank is looking to double the bank’s business from estimated around Rs 5 lakh crores in FY2016 to Rs 10 lakh crores in FY2019 with compounded annual growth rate (CAGR) of around Rs 20 per cent per annum, re-balancing of portfolio mix with more focus on micro, small and medium enterprises (MSME)/agriculture and retail credit especially more focus on priority sector lending (PSL) sub-targets.

With this there are also looking to augment CASA by strategic growth at CAGR of only 22 per cent and controlling cost to maintain cost to Income ratio at less than 35 per cent. Increasing bank’s fee based income at a growth of 22 per cent CAGR.

Further adding to make a near zero net non-performing assets (NPA) bank by FY2019 through intensive recovery efforts as well as up gradation of accounts by various resolution modes, containment of GNPA below 3 per cent by continued step up efforts for recovery/resolution by end of FY19, strengthening NIM to around 3 per cent in FY2019, improving return on assets (RoA) to 1 per cent and return on equity (RoE) to 13 per cent by FY2019, to meet rating agencies expectations of having sufficient cushion in CET1 and overall capital adequacy especially in the backdrop of asset quality stresses in the banking system.

IDBI Bank's Q3 was by far the worst quarter for the bank. Bank posted a net loss of Rs 2184 crore. The net NPA stands at 4.6 per cent as against 3.16 per cent Q-O-Q. The bank’s provisions for the quarter rose to Rs 3722.67 crore from Rs 956.25 crore in the same period a year ago and Rs 1289.31 crore at the end of September. The scrip closed at Rs 59.50 on Tuesday, an increase of 1.80 per cent from previous close.