Marginal Increase in IDBI Q1 Net Income

Industrial Development Bank of IndiaIndustrial Development Bank of India (IDBI) has recorded a net profit of Rs 153 crore for the first quarter (April-June period) of the recent fiscal that will exhibit a rise of 1.32 per cent over Rs 151 crore in the corresponding period last year.

The decelerating growth was because of increase in funds cost and higher provisioning for bad loans and investments.

The bank’s overall earning’s rose by 31 per cent to Rs 2,193 crore for the quarter ended June 30, 2007.

IDBI’s chief financial officer L P Agarwal said, “The cost of funds (deposits plus market borrowings) has gone up substantially – by 109 basis points – to 7.75 per cent in the last 12 months. This has dented the net interest income.”

The returns on earning advancements came up to 9.15 per cent from 7.90 per cent a year ago.

The deposits came up by 61 per cent to Rs 46,757 crore, whereas advances ascended to Rs 59,772 crore in last 12 months. But, compared with the previous quarter, advances indicated a reduction of Rs 2,699 crore.

Mr. Agarwal stated that the bank would evaluate the business goals for 2007-08 from the approximated 15-20 per cent credit growth.

The bank’s provisions for non-performing assets (NPA) and investments arose 2.5 times to Rs 104 crore as compared to Rs 41 crore in the first quarter of 2006-07.

The net NPAs ascended to 1.15 per cent from 1.02 per cent a year ago, while capital adequacy stands at 14.38 per cent against 14.00 per cent last year.