IDBI Bank Shares Hit 16-Year Low As They React To Poor Q1 Results

Shares of IDBI Bank fell nearly 12 percent on Friday morning to touch an intraday low of Rs 23.95 each, the lowest since May 2003. The public sector lender reported its financial results for the first quarter (April-June) on Wednesday, after market hours.

It reported a loss of Rs 3800.84 crore, which is greater than Rs 2,409.89 crore for the same period a year ago on account of higher provisions and lower net interest income. Provisions made for the quarter were 20.93 percent higher at Rs 6,332.05 crore for the June quarter as against Rs 5,235.96 crore a year ago. In the March-ended quarter, the bank had made provisions worth Rs 8,532.78 crore.

The net interest income, which is the difference between interest earned on loans and that paid on deposits, was 11.04 percent lower at Rs 1,457.73 crore for the April-June period from Rs 1,638.62 crore a year ago.

Further, the lender's gross non-performing assets rose to 29 percent of the total advances for the quarter under review from 27 percent in the previous quarter.

Since 21 January, when the bank was officially recognised as a public sector bank and LIC became its majority stakeholder (of 51 percent), the lender's share value has fallen by more than half. On the day of completion of acquisition by LIC, the shares were priced at Rs 56 apiece.