LIC to infuse up to Rs 12k cr into IDBI Bank

The fresh support is required to cover for non-performing assets (NPAs) in the January-March quarter. Life Insurance Corporation of India (LIC) completed acquisition of 51 per cent controlling stake in IDBI Bank on January 21. The bank received total capital of Rs 21,624 crore from the insurer in the four-month period prior to formalisation of acquisition. 

Recently IDBI and LIC officials met Department of Financial Services senior officials and are said to have taken up the matter of fresh capital infusion. LIC has not commented so far.  In the backdrop of capital infusion from LIC, the bank has achieved regulatory capital requirement as on December 31, 2018, and its common equity tier-1 (CET-1) capital improved to 9.32 per cent as on December 31, 2018, against 6.62 per cent a year ago.

IDBI Bank Q3 loss has widened threefold to Rs 4,185 crore. Total income decreased to Rs 6,190.94 crore for the quarter, compared with Rs 7,125.20 crore in the corresponding quarter a year ago. The bank’s gross NPAs shot up to 29.67 per cent of gross advances during the quarter, against 24.72 per cent in the year-ago period. However, net NPAs declined to 14.01 per cent of the total advances, from 16.02 per cent in the December 2017 quarter.