IDBI Bank July-Sep net up 57 pct, beats f'cast

Net profit of the bank for the second quarter was at 2.54 billion rupees, up from 1.62 billion rupees a year ago. A Reuters poll of brokerages had estimated profits at 1.95 billion rupees.

"Profitability grew on the back of good growth in the net interest income and fee-based income front," Yogesh Agarwal, chairman and managing director, told reporters at a press conference.

The bank's net interest income rose to 4.72 billion rupees, up from 1.29 billion rupees a year ago, while fee-based income rose 99 percent to 3.90 billion rupees.

Its net interest margin rose to 1.07 percent, up from 0.41 percent a year ago with cost of deposits coming down as high cost deposits were getting retired, Agarwal said.

"Core income helped profits grow for the bank," said an analyst in a Mumbai-based brokerage, on condition of anonymity.

The bank, with a capital adequacy ratio of 11.9 percent, is waiting for government approval to raise funds for growth.

"Government owns around 52 percent in the bank and it will have to take a call on modes of capital-raising to be made available to the bank," he said.

"We hope to tap the (capital) market by January 2010, subject to government deciding on mode of capital raising to be adopted by the bank," he said.

Its capital adequacy at tier I level was at 6.83 percent, while that in the tier II segment was at 5.07 percent.

The bank will also raise $225 million via syndicated loans to meet its growth targets, R.K. Bansal, chief financial officer, said adding the bank is targeting a loan growth of 20 percent in the current fiscal.

"We will be signing for this foreign currency loan tomorrow," he said. The loan will be for a one-year tenure with an all-inclusive cost of 6.2 percent.