IDBI narrows losses to Rs 3,459cr on higher margins,lower NPAs(Eds: correcting name in headline)

IDBI narrows losses to Rs 3,459cr on higher margins,lower NPAs(Eds: correcting name in headline) Mumbai, Nov 8 (PTI) Improving asset quality and bettermargins helped the crippled IDBI Bank to marginally narrow itsnet losses at Rs 3,459 crore in the September quarter, eventhough the the lender chose to make accelerated provisions forstressed assets.

The Life Insurance of Corporation-controlled bank,which has been under the prompt corrective action of theReserve Bank for more than a year, had reported a net loss ofRs 3,602 crore in the year-ago period.

The management attributed the losses to 'acceleratedprovisions to the tune of Rs 3,425 crore, helping it take theprovision coverage ratio to 91.25 from 68.72 from a year ago.' Managing director and chief executive Rakesh Sharmatold reporters that total provisions during the quarter stoodat Rs 4,453 crore. However, the key net interest marginimproved by 53 basis points to 2.33 percent during thereporting, massively up from 1.80 percent a year ago.

The gross NPA ratio stood at 29.43, marginally betterthan 31.78 it had reported in the year-ago period, while thenet NPA ratio came down to third at 5.97 from a high 17.30.

Tier 1 capital and CRAR stood at 9.52 percent and11.98 percent, respectively.

During the quarter, the bank received Rs 4,743 crorefrom LIC and Rs 4,557 crore from government aggregating to Rs9,300 crore.

'As on date, we are complying with all the guidelines,which can take us out of the PCA, except for profitability.

Capital adequacy, leverage and net NPA ratio is all compliedwith. We will now request the regulator to take us out of thePCA,' Sharma said.

Fresh slippages stood at Rs 2,059 crore whilerecoveries and upgrades were to the tune of Rs 1,759 crore.

Sharma said there were no recoveries from NCLTaccounts but expects good recoveries from these accounts inthe reminder of the fiscal, 'which should help us in reducingnet NPAs and improving our profitability.' The city-headquartered lender had around Rs 6,295crore of SMA 2 accounts.

Sharma said the bank expects to complete stake sale inIDBI Federal Life by end March, which should also help itsbottomline in the coming quarters.

The lender's scrip ended 2.38 percent down at Rs 32.80on BSE as against an 81 bps plunge in the benchmark Sensex.