IDBINSEQ1 FY23July 21, 2022

IDBI Bank Limited

3,920words
65turns
5analyst exchanges
5executives
Management on call
Rakesh Sharma
MD AND CEO
Samuel Joseph
DEPUTY MANAGING DIRECTOR
Suresh Khatanhar
DEPUTY MANAGING DIRECTOR
P. Sitaram
ED AND CFO
Renish Bhuva
ICICI SECURITIES LIMITED
Key numbers — 40 extracted
Rs. 590 crore
in this context that we had two major recoveries from Kingfisher and Videocon account and as the Rs. 590 crores was credited to interest on recovery, interest income and Rs. 278 crores in two, apart from othe
Rs. 278 crore
eocon account and as the Rs. 590 crores was credited to interest on recovery, interest income and Rs. 278 crores in two, apart from other recoveries and that quarter we had recoveries of Rs. 1,646 crores. So,
Rs. 1,646 crore
come and Rs. 278 crores in two, apart from other recoveries and that quarter we had recoveries of Rs. 1,646 crores. So, this Rs. 868 crores was unusual income. So, the results have to be seen in that context,
Rs. 868 crore
two, apart from other recoveries and that quarter we had recoveries of Rs. 1,646 crores. So, this Rs. 868 crores was unusual income. So, the results have to be seen in that context, so that is why since high
Rs. 1,136 crore
rs will have to be seen in Q-o-Q reference March 2022. And overall, we have also recovered around Rs. 1,136 crores recoveries have been made during the current quarter, but these have mostly gone in reversal of
12%
corporate advances. Earlier there were some restrictions about corporate. So, the growth has been 12% YoY, both in retail and corporate and this is a good sign and a good beginning. Apart f
1.03%
ning. Apart from that we have been able to achieve the other targets which I said. ROA of 1.03%, ROE of 14.80%, which are all above the guideline’s information. Slippage ratio is 2.5. Credit
14.80%
Apart from that we have been able to achieve the other targets which I said. ROA of 1.03%, ROE of 14.80%, which are all above the guideline’s information. Slippage ratio is 2.5. Credit cost I had given
25%
se despite proactive provisioning there has been good, this net profit there has been increase of 25% Y-o-Y and 10% Q-o-Q. And the capital adequacy is quite comfortable with CET of 17.13 and total ca
10%
active provisioning there has been good, this net profit there has been increase of 25% Y-o-Y and 10% Q-o-Q. And the capital adequacy is quite comfortable with CET of 17.13 and total capital adequacy
95%
total capital adequacy of 19.57. The digitalization we have been making some good improvement and 95% of our customers in those transactions are through digital channel only. So, there is good invest
Rs. 1,727 crore
here MD left off. See, if we exclude the one-offs, the net interest income in Q1 of last year was Rs. 1,727 crores. Then Q4 of last year, Rs. 1,881 crores. And Q1 of this year is Rs. 2,021 crores. So, there has
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Guidance — 20 items
Rakesh Sharma
opening
“So, with that I would also like to mention that whatever guidance note we had given previously at the beginning of the year, we have been able to achieve all the targets, rather in some cases we have been able to surpass the targets.”
Rakesh Sharma
opening
“Credit cost I had given indication that it will be around 1.25.”
Rakesh Sharma
opening
“But this time we are improving upon the guidance note.”
Rakesh Sharma
opening
“And we feel that since we have been able to control the slippages, the credit cost will be less than 1 and for this quarter it is 0.52.”
P. Sitaram
opening
“I am conscious that many of you may have to attend to other calls, so I will be quite brief.”
P. Sitaram
opening
“Even this quarter we have booked the MTM losses, but they are quite moderate and going forward also we don’t expect any unusual shock from that side.”
P. Sitaram
opening
“So, this well within the guidance that we had given, and MD has already mentioned that.”
P. Sitaram
opening
“We have invested and going forward also we will continue to invest in improving the digital footprint.”
P. Sitaram
qa
“So, that whatever was 14 days reverse repo we…now subsequently, recently RBI has clarified that that will be only if it is done through the market mechanism.”
Management
qa
“We are not seeing really the high level of stress emanating from that, but since we are only in Q1, entire industry wants to see the remaining three quarters also to go by, to be able to assess exactly what will be the stress.”
Risks & concerns — 2 flagged
This is for any likely stress that can emanate from this portfolio.
— P. Sitaram
We are not seeing really the high level of stress emanating from that, but since we are only in Q1, entire industry wants to see the remaining three quarters also to go by, to be able to assess exactly what will be the stress.
— Management
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Q&A — 5 exchanges
Q
I have a couple of questions. It looks like the March 2022 has been restated and moreover it is more in the line of other and cash and bank balance. So, could you please let us know, what is the rationale behind restatement, why it is so? That is the first question.
P. Sitaram
That restatement is due to RBI clarification. Earlier they had said that the reverse repo should be included in advance, term reverse repo. So, that whatever was 14 days reverse repo we…now subsequently, recently RBI has clarified that that will be only if it is done through the market mechanism. So, RBI reverse repo is to be route back with cash and bank balance. So, that is the regrouping we have done. Understood, sir. And sir, the next question is more on the EL side. So, there is a sharp drop in your yield on advances on (Inaudible) (13.23). So, just wanted to know what it looks like and i
Q
First of all, thank you for actually ramping presentation and advances slide correctly and thanks for noting that from the lost call. Second thing is also you have included other income but has also solved our problems a lot. I have just two doubts to start with, first of all the 777 crores provisions that you have done on the restructured book that you were mentioning in notes to accounts, where in the P&L it has hit because you have also given in the subsequent slides the provisions and in that there is no figure standing out as 777…
Management
I know that is the accounting presentation. We had made anticipated provision on cases like future, in March itself before they slipped. Now when they slip it will move out of standard asset provision to NPA provisions. Likewise, there are movements in and out of standard asset provision and what is reflected in account is the net of all this accounting debits and credits. So, this additional provision that is made 777 is also included in that, but he will not see the figure straight away because of all the various other movements which are there. So, it is some are clubbed in that split of pr
Q
I have couple of questions, one is on the slippage side, our total slippages how much of the slippages has flown from the standard restructured book this quarter?
Management
We mentioned the COVID restructured, so if you remove that… From the standard restructured book hardly, anything is there. So, when you say standard restructured other than COVID's restructured, we have this 5/25 and S4A and other restructuring, hardly any cases have slipped from that. In fact, I will probably say zero. From COVID restructuring pool? That is what we mentioned, the Future 356 crores in corporate and 92 in retail. Otherwise, all accounts or running fine. Secondly more or less on the industry level, maybe we are seeing this the corporate credit has been gathering from the last 4-
Q
Can you highlight what are the steps now taken for divestment of government stake, there was news in the media that the government is asking something from RBI which will ease the process?
Management
Actually, as you are aware that this entire process of disinvestment is being held by DIPAM and they are basically they are the owner of the bank like 45% share with Government of India and the 49% with LIC. So, the entire process is, since it is being handled by them, they are only running the process, I think they will be in a better position to answer this disinvestment question because we are only aware whatever is coming to media, otherwise as such they will be the best persons to answer this question. In terms of cost of employees, is it safe to assume that now this quarterly run rate of
Q
Thank you very much for attending this conference, we are aware of as Mr. Sitaram said that we have to join some RBI conference also. Thank you very much, despite the busy schedule you have stated time and thanks to ICICI Securities also for organizing this call very nicely. Thank you.
Management
Speaking time
Management
28
Pranav
18
Moderator
7
Renish Guha
4
P. Sitaram
3
Suraj Das
3
Renish Bhuva
1
Rakesh Sharma
1
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Opening remarks
Renish Bhuva
Hi, hello and good evening to everyone. Welcome to the IDBI Bank Q1 FY23 Earnings Conference Call. From the management team we have with us today Mr. Rakesh Sharma – MD and CEO, Mr. Samuel Joseph – Deputy Managing Director, Mr. Suresh Khatanhar – Deputy Managing Director and Mr. P. Sitaram – ED and CFO. We will start the call with brief opening remarks We will start the call with brief opening remarks and then we will open the floor for Q&A. On behalf of ICICI Securities I would like to thank the IDBI management team for giving us the opportunity to host the Q1 FY3 Earnings Conference Call. I will now hand over the call to Mr. Rakesh Sharma for opening remarks. Over to you, Sir.
Rakesh Sharma
Thanks Mr. Renish. Good evening, ladies and gentlemen and welcome to this IDBI Bank analyst call. Thanks for attending the call. First of all, before I hand over the mic to Mr. Sitaram for making the presentation, I like to give some brief background. The June 2021, the results have to be seen in this context that we had two major recoveries from Kingfisher and Videocon account and as the Rs. 590 crores was credited to interest on recovery, interest income and Rs. 278 crores in two, apart from other recoveries and that quarter we had recoveries of Rs. 1,646 crores. So, this Rs. 868 crores was unusual income. So, the results have to be seen in that context, so that is why since high one-off income was there in June 2021, so the numbers will have to be seen in Q-o-Q reference March 2022. And overall, we have also recovered around Rs. 1,136 crores recoveries have been made during the current quarter, but these have mostly gone in reversal of provisions. So, the operating profit and the ne
P. Sitaram
I am conscious that many of you may have to attend to other calls, so I will be quite brief. I will not run through the presentation as such. One thing, to take up from where MD left off. See, if we exclude the one-offs, the net interest income in Q1 of last year was Rs. 1,727 crores. Then Q4 of last year, Rs. 1,881 crores. And Q1 of this year is Rs. 2,021 crores. So, there has been an improvement steadily over the three period, if we exclude all these one-offs. And in terms of NIM it was 2.8%, 3.09% and 3.26%. So, again there is a steady improvement in all the three. So, the highlights MD has covered that we have shown improvement in all fronts, the NIM if we exclude this interest on IT refund in this quarter, is 3.73%. Then cost to income we have maintained where we are. ROA, we have crossed 1%. ROE, we have almost touched 15. Net NPA has come down to 1.25 with a PCR of 97.79. Overall, there is a growth in advances. Slight decrease in deposit but if you look at the daily average basi
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