IDBI Bank plunges into red for first time as NPAs soar

State-run IDBI Bank on Friday joined its peers in cleaning up its books and reported a massive loss of Rs 2,183.68 crore for the December quarter after classifying a whopping Rs 5,800 crore as fresh slippages.

The bank warned of more pains in the March quarter to meet the Reserve Bank directive to clean the books by the end of the fiscal year.

The city-based lender had posted a net profit of Rs 102.79 crore in the December quarter of the past fiscal year.

Under the asset quality review, RBI has asked banks to reclassify as many as top 150 accounts as non-performing loans and make provision for them before the end of the March quarter.

"Keeping in view the fresh RBI norms of asset quality review, we have made additional provisioning of Rs 3,300 crore in the quarter, which includes prudential provisioning of Rs 1,247 crore. However, let me add that we have been doing the exercise much before the RBI norms came," IDBI Bank Managing Director and Chief Executive Kishor Kharat said this evening.

"We have also made prudential provisioning against some of our standard assets and the exercise may continue for the remaining part of the fiscal, too, in our bid to clean the bank's balance-sheet," he said.

The bank has chalked out a three-pronged strategy to raise capital to fuel its future growth, which includes raising money through qualified institutional placement, additional tier-I bonds and sale of non-core assets. The Government, which holds 80 per cent stake in the bank, has already infused Rs 2,200 crore in the lender.

"We are looking at raising money through either QIP, or additional tier-I bond or even sale of non-core assets as to meet future capital requirement of the bank," Kharat said.

The bank has already conducted roadshows for its plan to raise capital through QIP to the tune of Rs 3,800 crore and it is looking at raising money valued at $500 million-$1 billion through either additional tier-I bond or sale of non- core assets. Some of the non-core assets the bank is considering selling include stakes in Care Rating, NSE, NSDL and Arcil, he said.

"The bank has done five strategic debt restructuring to the tune of Rs 3,500 crore in the reporting period," Deputy Managing Director B K Batra said, adding, "there are a few more cases under the SDR which are underway."

Net NPA rose to 4.60 per cent, or Rs 9,613 crore, from Rs 6,028 crore, while gross NPAs jumped to 8.94 per cent in the third quarter under review from 5.94 per cent in the year- ago quarter.

However, the bank saw its NIM rising to 1.96 per cent from 1.83 per cent. However, Kharat said the underline trend is to take it upward.