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    IDBI Bank shares jump 20% on Q4 turnaround

    Synopsis

    The lender posted a profit of Rs 135 crore for the March quarter on account of recoveries from bad loans.

    Grow,-gain-1---TSThinkStock Photos
    IDBI said net interest income (NII) improved by 46 per cent to Rs 2,356 crore for March quarter compared with Rs 1,609 crore last year same period.
    NEW DELHI: Shares of IDBI Bank surged 20 per cent in Monday's trade after the lender reported profit after 13 quarters of losses. Reports suggesting that the government may delay stake sale in the lender beyond March 2021, due to depressed valuation, also supported the stock.

    By 9.24 am, the scrip had jumped 19.95 per cent to hit a high of Rs 24.35 on BSE.

    The lender posted a profit of Rs 135 crore for the March quarter on account of recoveries from bad loans. The lender reported a profit after 13 straight quarters of net losses. It had posted a net loss of Rs 4,918 crore in the corresponding period of last year.

    “After a long gap of 13 quarters, we have been able to show net profit of Rs 135 crore in the March quarter. The profit would have been higher but for the recoveries that were affected during March due to the Covid-19 situation,” the bank's managing director and CEO Rakesh Sharma said.

    Sharma said recoveries had fallen short of by Rs 700 crore due to the disruptions caused by the coronavirus outbreak. The profit in the quarter was also supported by the reversal of Rs 1,500 crore of provisions made for non-performing loans (NPAs).
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    IDBI said net interest income (NII) improved by 46 per cent to Rs 2,356 crore for March quarter compared with Rs 1,609 crore last year same period.

    Net interest margin (NIM) improved by 154 basis points to 3.80 per cent for the fourth quarter compared with 2.26 per cent in the year-ago quarter.

    Meanwhile, sources told PTI that the government will have to cut down its expected realisation from stake dilution of IDBI Bank even if the market condition improves.

    The government currently owns a 46.5 per cent stake in IDBI Bank. Given the prevailing market situation, it seems to be difficult to do the LIC stake sale in the current fiscal as the situation is not conducive, sources said. IDBI Bank is a subsidiary of LIC.

    In January 2019, LIC completed acquisition of 51 per cent controlling stake in the lender. The state-owned life insurer infused Rs 21,624 crore into the bank.



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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