IDBI Bank today posted a 53 per cent decline in net profit

State-owned IDBI Bank today posted a 53 per cent decline in net profit to Rs 55.52 crore for the second quarter ended September 30, 2016 as provision for bad loans increased.

The bank reported a net profit of Rs 119.5 crore during the same period last fiscal.

Total income of the bank increased to Rs 8,387.20 crore during the quarter, as against Rs 7,913.64 crore in the year-ago period, IDBI Bank said in a statement.

During the quarter, gross non-performing assets (NPAs) nearly doubled to 13.05 per cent as against 6.92 per cent in the same period of the previous fiscal.

Net NPAs too moved up significantly to 8.32 per cent from 3.16 per cent in the year-ago period.

As a result, provisions for bad loans surged to Rs 920.48 crore from Rs 666.03 crore a year ago.

For the half year ended September, the bank's profit, however, rose by 17 per cent to Rs 296.62 crore as compared to Rs 254.68 crore in the same period of 2015-16 fiscal.

Total income also improved to Rs 16,606.63 crore as against Rs 15,817.01 crore in the corresponding period of last fiscal.

Kotak Mahindra Bank today reported a 27.65 per cent rise in net profit at Rs 1,202.40 crore for the September quarter, on a healthy increase in net interest margins.

The city-based private sector lender, which merged with the South-focussed ING Vysya Bank last year to become the fourth largest private sector bank, had reported a consolidated net profit of Rs 941.89 crore for the corresponding period a year ago.

On a standalone basis, net profit grew 43 per cent to Rs 813 crore in the reporting quarter.

Joint managing director Dipak Gupta attributed the healthy rise in profit to an expansion in net interest margin to 4.47 per cent from 4.30 per cent in the year-ago period.

He said the drop in the cost of funds was faster than the yield on advances, which helped expand the margins.

However, he observed that the scope for further increase is limited, saying the bank has reached the peak which it used to clock during the pre-merger days.

The core net interest income increased 19 per cent to Rs 1,995 crore, while non-interest income moved up to Rs 831 crore from Rs 615.73 crore in the year-ago period.

Total advances grew 13 per cent to over Rs 1.26 lakh crore, which included a 15 per cent growth in corporate lending and 20 per cent in consumer lending, but commercial lending was flat, Mr Gupta said.

Another factor that helped the bottom line was the improvement in the cost-to-income ratio to 49.7 per cent, in line with the guidance of bringing it under 50 per cent, he said.

An improvement in the proportion of the low-cost current and saving account deposits to 39 per cent also helped expand the margins.

On the asset quality front, gross non-performing assets (NPAs) ratio moved up 2.49 per cent from 2.35 per cent in the year-ago period, which resulted in a jump in the overall provisions to Rs 197 crore.