IDBI Bank's Q2 profit declines 39% YoY to ₹2,206cr
What's the story
IDBI Bank has reported a 39.2% year-on-year decline in its net profit for the second quarter of FY27. The bank's net profit stood at ₹2,206 crore as compared to ₹3,627 crore in the same period last year. However, the decrease is largely attributed to a high base effect from last year's exceptional gains.
Profit analysis
One-time NSDL gain last year impacted net profit this year
The significant drop in net profit was mainly due to a one-time gain of ₹1,699 crore from the sale of a strategic investment in NSDL last year.
Excluding this exceptional gain, IDBI Bank's net profit for Q2 FY27 would have been up 14% year-on-year.
Sequentially, the bank's net profit rose by around 4% from ₹2,115 crore in Q1 FY27.
Financial growth
NII and NIM show robust growth
IDBI Bank's net interest income (NII), the difference between interest earned and paid, rose by 28.7% year-on-year to ₹4,227 crore from ₹3,285 crore last year.
The bank's net interest margin (NIM) also improved significantly to 4.11% from 3.71% in the same quarter last year.
This is an expansion of 40 basis points over the previous year and a sequential increase of 50 basis points from Q1 FY27's NIM of 3.61%.
Operational efficiency
Operating profit rises by 33% sequentially
IDBI Bank's operating profit for Q2 FY27 stood at ₹2,893 crore, a 33% sequential rise. Excluding last year's one-off NSDL gain, the operating profit grew by 59% year-on-year.
The bank's cost-to-income ratio improved to 48.17%, a sequential improvement of 385 basis points from Q1 FY27.
Meanwhile, the cost of deposits fell to 4.55% from last year's figure of 4.69%.