IDBI net drops 9.7% amid high fund cost, Kingfisher account

The youngest public sector lender IDBI Bank today reported a 9.7 percent dip in its third quarter earnings to Rs 410 crore on rising bad loans and higher interest expenses.
"We had to take a hit on our post-tax profit due to a one-time provision of Rs 105 crore on account of an aviation account which has become non-performing (the bank has a Rs 700-crore bad loan exposure to Kingfisher Airlines), during the December quarter, which pushed up our gross bad loans to Rs 750 crore," chief financial officer P Sitaram told PTI in a post-result conference call.
Banks have to make 15 percent provisioning for the bad loans in the aviation sector under the RBI norms.
However, he expressed the hope that the bank will be able to maintain its full year earnings at least at the previous fiscal level.
The bank also has nearly 1,000 crore exposure to the troubled national carrier Air India, which is not a substandard asset.
The city-based lender had reported Rs 454 crore profit in the corresponding quarter last year.
31/01/12 PTI/Economic Times

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Categories: Kingfisher Feb 2012