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MUMBAI: IDBI Bank reported a loss of Rs 3,602 crore for the quarter ended September 2018 as against a net loss of Rs 198 crore in the same quarter last year.

Announcing the results the bank’s CEO Rakesh Kumar said that Life Insurance Corporation (LIC) is set to infuse Rs 20,000 crore into the bank, which will immediately improve the bank’s capital adequacy ratio to 16% from 6.22% at present, but might drop after next quarter’s results.

The public sector bank continued to report losses as it had to set aside Rs 4,715 crore toward loans that had turned bad. Kumar said that LIC’s investment is awaiting approval from the competition commission , following which Sebi approval is expected. LIC has already decided on a tentative date of December 4 for an open offer. The country’s largest insurer’s stake in the bank will rise to 51% from 14.9% at present.

“The bank is generating operating profits. The losses are on account of ageing provisions on non-performing assets (NPAs). We expect that by the end of the year, all the provisioning requirement will be complete, and the bank will return to profits in the first quarter of FY19,” said Kumar.

In addition to LIC’s stake purchase, the bank will raise capital by selling assets, such as its stakes in its subsidiaries. “We will take a decision on IDBI Federal Life Insurance in consultation with LIC once it completes its investment,” said Kumar. IDBI Bank has continued to shrink its corporate loan book as it now lends only to retail, small business and agriculture sector in keeping with the requirements of RBI’s PCA.

