22 Jan , 2022 By : monika singh
Mumbai: IDBI Bank reported a 53% rise in net profit mainly due to a decrease in cost of funds, which helped boost both net interest income and net interest margin (NIM).
Net profit rose to ?578 crore in the quarter, from ?378 crore a year ago.
Net interest income (NII), or the difference between the interest earned on loans and that paid on deposits, increased 31% to ?2,383 crore mainly as the bank's cost of funds fell 60 basis points year on year to 3.79% in December 2021.
The fall in its cost of funds also helped IDBI Bank improve its NIM, which is the difference between the yield a bank earns on loans and that it pays for deposits. NIM improved 101 bps to 3.88% from 2.87% a year ago.
The rise in NII and NIM masked a tepid loan growth of 5% led by a 13% year on year growth in mid corporate loans and a 5% growth in retail, agriculture and micro enterprises. Total deposits fell 1% as the bank moved away from high-cost bulk deposits.
CEO Rakesh Sharma acknowledged that the bank's loan growth has been slow but said he is confident of growing above 10% led by retail and mid corporate loans in the next fiscal. A drop in provisions also contributed to the bank's net profit. Provisions dropped 11% to ?1,189 crore from ?1,332 crore a year ago as the bank continued to improve recoveries.
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