IDFC Bank’s Provisions Increase More Than 900% In Third Quarter
Net profit in the October-December quarter fell to Rs 191.26 crore from Rs 242.2 crore.
IDFC Bank Ltd. registered a 21 percent decline in net profit year-on-year, in the third quarter as India's newest universal bank increased provisioning by over 10 times from the previous quarter.
The bank's net profit in the last three months of 2016 fell to Rs 191.26 crore from Rs 242.2 crore in the same quarter last year, it said in a stock exchange filing. The Bloomberg consensus of analyst estimates had expected the bottom line to be at Rs 241 crore.
Asset quality deteriorated heavily as gross non performing assets (GNPA) increased by 107 basis points sequentially to 7.03 percent. GNPA in absolute terms stood at Rs 3,586.7 crore, higher by 11.4 percent. Net non performing assets also went up by 13 basis points to 2.57 percent.
The bank increased its provisioning for bad loans in the third quarter by 937 percent to Rs 231.75 crore from Rs 22.3 crore in the previous quarter. Sunil Kakkar, the chief financial officer of the bank attributed the higher provisioning to a slippage in one of the “non-legacy” assets.
Only the net interest income in the third quarter increased 34.8 percent to Rs 521 crore from Rs 386.3 crore in the corresponding quarter last year.