2010VP07 IDBI Bank Ltd

BSE: 500116 | NSE: IDBI

	Market Cap 8,473.21 Cr EPS (TTM) 14.16 P/E 8.26 Book Value 102.71			CMP 116

IDBI Bank chairman and managing director Yogesh Agarwal expressed confidence that the bank will emerge as the fifth largest bank in the country by the year 2012.

The bank’s local branch, the 40th in the State, was formally inaugurated by TTD Executive Officer IYR Krishna Rao at Annamayya Circle here on Wednesday, in the presence of TUDA Chairman Ch.Bhaskar Reddy and proprietor of Mayura Hotel group S. Jayarama Chowdary.

Speaking on the occasion, Mr.Agarwal said that the branch would start functioning as a personal banking unit and shortly extend to Small and Medium Enterprises (SME) and agricultural business portfolios. He also said that the bank would expand its footprint to 20 new locations in the State by next year. The net profit for the quarter-ending December 31 stood at Rs.287 crore....

With the increase in CRR and the surplus liquidity once it is sucked out, interest rates are bound to firm up, in fact they have already started firming up especially on the corporate side. On the retail side, I suppose it will take a little longer but on the corporate side, I quite clearly see the firming up of deals.

On NIM, my target for the entire year was 1.2. For the nine-month period, we have already achieved 1.17 and in fact in the last quarter that the Q3 which you referred to as very strong result, my NIM for the quarter itself was 1.59. So I have no doubts that we will end the year with a much higher NIM than the target of 1.2.

credit growths, most of it takes place in the last quarter and this year is no exception in fact as end of December, IDBI`s credit growth year on year was already 21%. So we hope to end the year and in fact we are quite confident of meeting our internal targets which should definitely be upwards of 20%, year on year credit growth by the end of March. As I said we are already at 21% end of December.

Capital adequacy is definitely an issue which we have taken up with the government and we need Tier 1 from the government which is not likely to come up this year so my Tier 1 as you said is at 7%. We are now raising some money which we can wherever there is headroom, we will be raising it and my capital adequacy which is around 11.5% I think will end the year around that level only.
This fiscal we are not expecting anything from the government because the government has told us that they will not be able to provide us with any capital this year but they have promised me the capital which I have asked for in the next fiscal.

Well NPAs if you say as were expected on the corporate side there is not much pressure accretion of NPAs but the areas of concern is around the SMEs this time and in SMEs we have seen some accretion of NPAs during the quarter especially in SMEs which are heavily dependent on exports. So I suppose this is in line with the market trend with the worldwide trend and SMEs which are dependent on exports are definitely facing a bit of stress but I suppose at once the domestic and the world economy picks up these SMEs will come back to standard category. ..

On acquisitions, which is always a hot topic with journalists, I have always been saying that we are looking at a couple of private sector banks for acquisition. Specific names I have always maintained that I will not be able to discuss till the deal is finalised, it is neither fair to us and neither fair to the acquired bank to reveal the names till the deal is finalised, just we are talking to them.

Well, look at my past history of IDBI, the two banks that we have acquired so far have all been in the private sector and in the market also, we have positioned IDBI Bank as a government-owned bank but run on the private sector lines, so the private sector banks are a better fit for IDBI Bank than the public sector bank, that is No 1 and the No 2 reason is that it is very difficult to acquire a bank in the public sector for reasons, which are very well known, nothing much is happening there and a lot of talk is happening but nothing is really moving forward. So in terms of really achieving any focussed results, it is much better to concentrate your energies on the private sector banks rather than on the public sector banks, I hope you agree with that.


The funds will come. I cannot reveal, let`s first the acquisition happen and when the acquisition happens, the funds will be there.