Title: IDBI Bank Share Price Soars by 57% in December Quarter, Reaching INR 1,458 Crore
Introduction:
IDBI Bank, a subsidiary of LIC, has witnessed a remarkable growth in its net profit for the December quarter. The bank’s net profit surged by 57%, reaching INR 1,458 crore, compared to INR 927 crore in the same quarter of the previous financial year. This remarkable performance can be attributed to increased interest income and NPAs’ reduction.
Key Highlights:
1. Net Profit Growth: IDBI Bank’s net profit for the December quarter has witnessed a significant increase of 57%, reaching INR 1,458 crore, compared to INR 927 crore in the same quarter of the previous financial year.
2. Interest Income: The bank reported an interest income of INR 6,541 crore for the December quarter, compared to INR 5,231 crore in the same quarter of the previous financial year.
3. NPA Ratio Improvement: The bank’s gross non-performing assets (NPAs) ratio improved to 4.69% for the December quarter, compared to 13.82% in the same quarter of the previous year.
4. Net NPA Ratio: The net NPA ratio for the bank decreased from 1.08% in December 2022 to 0.34% at the end of December 2023.
5. Provision and Contingent Expenses: The bank’s provision and contingent expenses reduced to INR 320 crore for the December quarter, compared to INR 784 crore in the same quarter of the previous year.
6. Capital Adequacy: The bank’s capital adequacy ratio improved to 20.32% for the December quarter, compared to 20.14% at the end of December 2022.
Ownership Details:
★Government Stake: The government holds more than 45% stake in IDBI Bank and is planning to sell its shares. This process is expected to gain momentum in the next financial year. In the meantime, Life Insurance Corporation (LIC) is interested in maintaining a strategic stake in the bank to leverage its bancassurance channel. LIC currently holds a 49.24% stake in the bank.
Share Price Performance:
During trading on January 22, 2024, there was a spike in buying of IDBI Bank shares, resulting in increased competition. The stock closed at INR 79.04, reflecting a growth of 13.45% compared to the previous day’s closing price. During the trading session, the share price reached a high of INR 80.52, which is the highest level in the past 52 weeks.
Short:
IDBI Bank has shown significant growth in its net profit and other financial indicators for the December quarter. With the government planning to sell its stake in the bank and LIC aiming to maintain its strategic shareholding, the bank’s performance is expected to attract more attention from investors. The surge in share prices further indicates growing investor confidence in IDBI Bank’s future prospects.
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