IDFC posts Rs 449cr net in June quarter

MUMBAI: IDFC has reported a net profit of Rs 449 crore for the quarter ended June 2014 - a drop of 12.7% from the net profit of Rs 515 crore in the corresponding period last year following a sharp rise in provisions. The drop in profit came as the institution cleaned up its balance sheet in preparation to transform itself into a bank.
IDFC's gross non-performing assets rose to Rs 343 crore - a 90% jump from gross NPA of Rs 182 crore in the corresponding quarter last year.The ratio of gross non-performing assets to total assets also doubled to 0.64% from 0.32% a year back as there was no growth in loan assets. The net NPAs (bad loans after provisions) also jumped 103% to Rs 229 crore - up from Rs 112 crore a year ago.
The consolidated net profit of the company stood at Rs 481 crore - a drop of nearly 14% over the net profit of Rs 557 crore in the corresponding quarter last year.
Earnings also took a big hit following a 241% jump in provisions (including provisions for bad loans) to Rs 201 crore from Rs 59 crore in the same quarter last year. The infrastructure body got some relief from writeback of earlier provisions made toward depreciation and amortization expense.
A statement issued by the company said that its gross loan book shrunk 7% to Rs 53,848 crore from Rs 57,600 crore. Gross approvals fell 68% from Rs 3,115 crore to Rs 988 crore in the quarter ended June 2014. Gross disbursements decreased by 23% from Rs 3,206 crore to Rs2,463 crore in the same period.
With no growth in loans the institutions capital adequacy ratio improved to 23.92% from 23.27% a year ago. IDFC is among the two successful applicants for a bank licence from RBI after the central bank opened its licencing window after more than a decade. The other successful applicant is microfinance company Bandhan. The in-principle approval granted in April is valid for 18 months and IDFC has to move forward on all fronts to convert itself into a bank.