IDBI Bank Q2 FY25 Earnings: 39% Net Profit Jump and Improved Asset Quality

IDBI Bank posted a 39% jump in the net profit to ₹1,836 crore from ₹1,323 crore in the year-ago period, while the bank’s net interest income increased by 26%

IDBI Bank Q2 FY25 Earnings: 39% Net Profit Jump and Improved Asset Quality

IDBI Bank has seen net profits stand at a commendable ₹1,836 crore in Q2 FY25. The rise is 39 per cent sequentially from ₹1,324 crore in Q2 FY24. The only reason is higher interest income. Also, net interest income has risen 26 per cent YOY with total income at ₹8,754 crore against ₹6,924 crore for Q2 FY24. This growth was because of the bank’s success in bringing out maximum interest earnings with comparatively controlled costs. Once more, NIM improved to 4.87% as compared to the previous year from 4.33%.

IDBI Bank Q2 FY25 Results Summary

IDBI Bank Q2 FY25 Results Summary

Metric Q2 FY25 Q2 FY24 Year-over-Year Change
Net Profit ₹1,836 crore ₹1,323 crore +38.78%
Total Income ₹8,754 crore ₹6,924 crore +26.41%
Net Interest Income (NII) ₹3,875 crore ₹3,066 crore +26%
Net Interest Margin (NIM) 4.87% 4.33% +0.54%
Gross NPA 3.68% 4.90% -1.22%
Capital Adequacy Ratio 21.98% 21.26% +0.72%
Provision Coverage Ratio 99.42% 99.10% +0.32%
Operating Profit ₹3,006 crore ₹2,072 crore +45%
Total Deposits ₹2,77,602 crore - +11%
Net Advances ₹2,00,944 crore - +19%
Cost-to-Income Ratio 42.05% 47.63% -5.58%

Asset Quality and Growth Indicators

The asset quality of the bank continues to improve. Gross non-performing assets decline to 3.68% of gross advances from 4.90% as compared with the previous year. It here presents effective management of non-performing loans, an important factor for the stability of banks. The Provision Coverage Ratio including technical write-offs stood at 99.42%, which rose marginally over the last calendar year. Such a very high ratio indicated that the IDBI Bank is better prepared for potential loan losses, thereby increasing the financial resiliency.

Other notable parameters were encouraging too. Capital adequacy ratio was the barometer of financial health and improved to 21.98% from 21.26%, thus putting the bank on a strong footing for growth. Operating profit at ₹3,006 crore rose by 45% sequentially year on year, thus reiterating proper cost control and more impressive revenue expansion.

Deposit and Loan Growth

Total deposits of IDBI Bank has also risen by 11 percent at ₹2,77,602 crore. Increase in total deposits enhances bank’s ability to lend as well as liquidity, two areas where IDBI Bank will gain in the next couple of years also.

But the growth of advances or issuance of loans upped by 19 percent at ₹2,00,944 crore, thereby indicating that people needed more credit and still believed in the bank’s lending services.

Stock Market and Financial Position

Market performance of IDBI Bank’s Shares: The share rose by 1.78% to ₹82.76 on October 25. Its market capitalisation was almost ₹88,987 crore and it was an essential constituent of the Indian banking system. The bank has managed to bring down its cost-to-income ratio from 47.63% to 42.05%, which suggests better profitability as well as effective control over costs.

Summary

Notwithstanding a few shortcomings, IDBI Bank’s Q2 FY25 results indeed do indicate very strong growth of finances, an increase in net profits, and a solid interest income the company takes ahead of others in the Indian banking sector. This growth comes off on the back of effective risk management, huge increase in deposits, and some control over cost. These would be well indicators going forward in terms of continued stability in growth.
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