IDBI BANK 2023-24 Annual Report Analysis

Tue, 2 Jul

IDBI BANK has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the bank during the year 2023-24.

IDBI BANK Income Statement Analysis

• Interest income during the year rose 28.4% on a year-on-year (YoY) basis.
• Interest expenses were up by 33.9% YoY during the same period.
• Operating expenses increased by 15.7% YoY during the year.
• The bank's net interest income (NII) increased by 24.1% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 4.7% in FY24 as against 4.4% in FY23.
• Other income declined by 14.2% YoY during the year.
• Net profit for the year increased by 56.2% YoY.
• Net profit margins during the year increased to 21.9% in FY24 from 18.0% in FY23.

IDBI BANK Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	205,915	264,457	28.4%
Other Income	Rs m	45,754	39,248	-14.2%
Interest Expense	Rs m	91,304	122,264	33.9%
Net Interest Income	Rs m	114,611	142,193	24.1%
Operating Expense	Rs m	72,326	83,704	15.7%
Pre-provision Operating Profit	Rs m	88,039	97,737	11.0%
Provisions & Contingencies	Rs m	51,171	40,103	-21.6%
Profit before tax	Rs m	52,788	83,244	57.7%
Tax	Rs m	15,920	25,610	60.9%
Profit after tax	Rs m	37,061	57,881	56.2%
Minority Interest	Rs m	-219	-260	-18.6%
Net Interest Margin	%	4.4	4.7
Net profit margin	%	18.0	21.9

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IDBI BANK Balance Sheet Analysis

• The bank's deposits during FY24 stood at Rs 2,773.7 bn as compared to Rs 2,553.1 bn in FY23, thereby witnessing an increase of 8.6%.
• Advances for the year stood at Rs 1,885.8 bn as compared to Rs 1,625.5 bn during FY23, a rise of 16.0%.
• Cost of deposits for IDBI BANK rose 24.6% and stood at 3.8%, while yield on advances rose to 9.5%.
• The lender's investments rose to Rs 1,157.2 bn during the year from Rs 1,004.1 bn in FY23.
• Borrowing stood at Rs 170.8 bn, a growth of 35.2% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 3,642.7 bn as against Rs 3,315.0 bn during FY23, thereby witnessing a rise of 9.9%.

IDBI BANK Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	463,192	510,731	10.3%
Advances	Rs m	1,625,458	1,885,756	16.0%
Deposits	Rs m	2,553,133	2,773,655	8.6%
Yield on advances	%	8.2	9.5
Cost of Deposits	%	3.1	3.8
Investments	Rs m	1,004,087	1,157,186	15.2%
Borrowings	Rs m	126,378	170,827	35.2%
Total Assets	Rs m	3,314,977	3,642,715	9.9%

Current Valuations for IDBI BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 5.4, an improvement from the EPS of Rs 3.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 84.5, stands at 13.4 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.8 times, while the price to income ratio stands at 2.9 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	19.2	24.6
Earnings per share (Unadj.)	Rs	3.4	5.4
Diluted earnings per share	Rs	3.4	5.4
Avg P/E ratio	Rs	13.4	13.4
Avg P/ABV ratio	Rs	1.3	1.8
Avg Market Cap	Rs	497,299	774,764
Dividends per share (Unadj.)	Rs	1.00	1.50

Ratio Analysis for IDBI BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio improved and stood at 68.0x during FY24, from 63.7x during FY23. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio decreased and stood at 5.77x during FY24, from 5.78x during FY23. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): IDBI BANK's capital adequacy ratio (CAR) was at 22.3% as on 31 March 2024 as compared to 20.4% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank improved and stood at 11.3% during FY24, from 8.0% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank improved and stood at 1.59% during FY24, from 1.12% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 15.68% during FY24, from 11.37% during FY23. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. IDBI BANK's gross NPA ratio stood at 4.5% as of 31 March 2024 compared to 6.4% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of IDBI BANK was 0.3% in financial year 2024. This compared with 0.9% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	63.7	68.0
Debt to Equity Ratio	x	5.8	5.8
Loans / Deposits	x	0.0	0.1
Capital Adequacy Ratio	%	20.4	22.3
Return on Equity	%	8.0	11.3
Return on Assets	%	1.1	1.6
Return on Capital Employed	%	11.4	15.7
% of Gross NPAs	%	6.4	4.5
% of Net NPAs	%	0.9	0.3
Yield on Advances	x	8.2	9.5
Yield on Investments	x	6.7	7.3

To see how IDBI BANK has performed over the last 5 years, please visit here.

IDBI BANK Share Price Performance

Over the last one year, IDBI BANK share price has moved up from Rs 55.3 to Rs 84.5, registering a gain of Rs 29.2 or around 52.8%.

Meanwhile, the S&P BSE BANKEX is trading at 59,317.2 (down 0.9%). Over the last one year it has moved up from 50,500.6 to 59,317.2, registering a gain of 8,816.6 points (up 17.5%).

Overall, the S&P BSE SENSEX is up 24.4% over the year.

(To know more, you can check out historical annual results for IDBI BANK here and quarterly results for IDBI BANK here)