Industrial Development Bank of India (IDBI) has reported a net profit of Rs 1,410 m for the 3QFY2000 which is a fall of 53.5% over the corresponding period of the previous year.
IDBI, is India's largest development finance institution and has been traditionally concentrating on project finance. It reported a turnover of Rs 74.6 bn for the year ending March'99.
Income from operations
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
Its disbursements jumped 15.6% to Rs 109 bn for the nine month period ending December'99 and its sanctions for the same period were up 12.1% to Rs 204 bn.
While interest expenses grew by 5.6% to Rs 16,040 m for the 3QFY2000, IDBI's interest income grew by only 3.5% to Rs 19,330 m in the 3QFY2000 from Rs 18,670 m in the 3QFY99. Its other income fell by 33.3% to Rs 420 m for the FY2000. The main reasons for this bad performance are pressure on spreads, a higher tax liability and fall in other income. On the tax front IDBI had to provide additional tax to the tune of Rs 700 m in the 3QFY2000. This is because the government allows income tax exemption on a net basis on income earned from infrastructure loans and not on a gross basis. As IDBI has calculated this exemption in the past on a gross basis, it is hence liable to pay higher taxes now.
As the market is still concerned about IDBI's NPA's it is rated as a "SELL" by many analysts.
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