IDBI Bank Limited

IDBI Bank Ltd. (IDBI Bank) is a provider commercial and wholesale banking services. It offers a range of personal, corporate, Micro, Small, and Medium Enterprises (MSME), Agri, and non-resident Indian (NRI) banking services. Under Personal Banking, the bank provides accounts, lockers, deposits, loans, cards, online banking, and investment services. Through Corporate Banking, IDBI Bank offers cash management, treasury, trade finance, foreign currency, syndication, and advisory solutions. MSME banking portfolio comprises financing, cards, and Mudra loans. Agri banking offerings include allied activities, indirect agriculture financing, and term loans.

Sector-wise breakup

• Industry – 34%
• Personal loans – 34%
• Services – 16%
• Agriculture – 12%
• Others – 4%

Shareholding Pattern

-PUBLIC GROUP

-PROMOTER GROUP

Financial Summary

Synopsis of Financials

• The bank has reported a PAT of 828 Crores which is the highest in its quarterly amount recorded in its history.
• The PBT is at 1437 Crores, operation profit of 2208 Crores. NII of 2738 and the NIM has come at 4.37. Overall, the ROA for the quarter is 1.09 on annualized basis and if you take the half yearly, it is about 1.03%.
• The ROE is above 15.2%.

Final Outlook

The banking sector is experiencing a substantial shift towards digital services, with predictions that digital payments will account for 65% of transactions by 2026. The fintech ecosystem in India is expected to grow to approximately $150 billion by 2025

IDBI Bank registered an all-time high net profit of ` 5,634 crore in FY 2023-24 while registering an annualised growth of 55% over the previous year. On the business front, the Bank’s total business improved to ` 4.66 lakh crore in FY 2023-24, registering an annualised growth of 12% over ` 4.18 lakh crore in FY 2022-23.On the asset front, net advances stood at ` 1.89 lakh crore, registering a growth of 16% (y-o-y). The Bank’s retail net advances portfolio grew by 17% (y-o-y) to ` 1.33 lakh crore and the Structured Retail Assets (SRA) portfolio stood at ` 83,882 crore, registering a growth of 11% (y-o-y) in FY 2023-24. On the liability front, the Bank’s deposit base increased by 9% (y-o-y) to ` 2.78 lakh crore with CASA deposits registering a growth of 3% (y-o-y) to ` 1.40 lakh crore.

However, it saw a marginal dip in the CASA ratio to 50.43% in FY 2023-24 from 53.02% in FY 2022-23Net Interest Income (NII) registered a growth of 24% (y-o-y) to ` 14,186 crore, Operating Profit increased by 10% (y-o-y) to ` 9,592 crore Profit Before Tax (PBT) increased by 56% (y-o-y) to ` 8,195 crore and consequently led to a 55% surge in its Net Profit to ` 5,634 crore for FY 2023-24

Overall, bank has been showing great signs of profitability since the last 4 years and its price movement has large upside potentials, even in the short term due to its current momentum. GoI and LIC’s strategic divestment is bound to bring more efficiency into the play, however a downside is that IDBI would lose a big financier like LIC.