IDBI Bank on Friday reported a 53 per cent jump in standalone profit after tax (PAT) at Rs 578 crore for the quarter ended December, aided by healthy growth in net interest income.

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The Life Insurance Corporation (LIC)-owned lender had reported a standalone PAT of Rs 378 crore in the corresponding quarter of the previous fiscal.

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Speaking to the reporters, the bank's Managing Director and CEO Rakesh Sharma said despite the challenging situation created by COVID-19, the lender has shown persistent growth and improvement in various financial parameters.

"Our collection efficiencies are improving so we don't foresee any stress now. Gross NPA is coming down and net NPA is also quite stable. Even the slippage ratio and credit cost are under control," Sharma said.

Net interest income (NII) rose by 31 per cent to Rs 2,383 crore in the December quarter as against Rs 1,817 crore in the year-ago period.

Net interest margin (NIM) improved by 101 basis points (bps) to 3.88 per cent as compared to 2.87 per cent.

Its gross non-performing assets (NPA) ratio improved to 20.56 per cent from 23.52 per cent and net NPA marginally reduced to 1.70 per cent from 1.94 per cent in the year-ago quarter.

Talking about the disruption caused by the Omicron variant, Sharma said he does not see any impact on the bank's asset quality, special mention accounts (SMA) levels or stress level.

The bank has identified Rs 11,000 crore of bad loans which will be transferred to the National Asset Reconstruction Company Ltd (NARCL). This transfer of bad loans will help the lender reduce its gross NPA by 4 per cent, he said.

The lender expects gross NPAs to come down to below 17 per cent by March 2022 and to 12 per cent by March 2023. It will maintain net NPA level at below 2.5 per cent till March 2022 and 2 per cent thereafter.

Slippages in the quarter stood at Rs 1,639 crore. Recovery and upgradation were at Rs 530 crore.

The bank is aiming to keep its credit cost and net slippages ratio below 1.75 per cent and 3 per cent respectively on a sustained basis as the COVID impact may continue up to March 2022.

Sharma said against the initial recovery target of Rs 4,000 crore that the bank had guided for the current fiscal, it has already recovered Rs 4,334 crore of bad loans as of December-end.

"We are hopeful that our recovery will reach Rs 5,000 crore by March 2022," he said.

Total provisions declined to Rs 1,189 crore from Rs 1,333 crore in the year-ago quarter.

Provision coverage ratio (including technical write-offs) improved to 97.1 per cent as on December 31, 2021 from 97.08 per cent as on December 31, 2020.

Capital to risk (weighted) assets ratio (CRAR) improved to 16.75 per cent from 14.77 per cent as on December 31, 2020. Tier 1 capital was at 14.13 per cent as against 12.22 per cent in the same quarter of the previous fiscal.

While its gross advances grew 5 per cent to Rs 1,67,317 crore, growth in deposits declined by 0.81 per cent to Rs 2,22,578 crore.

Sharma said the bank will focus on mid-corporate loans and will be taking smaller exposure to good companies. During the December quarter, the mid-corporate loan book grew 12 per cent.

"Going forward, our focus will be to grow in quality advances to show reasonable, sustainable and calibrated growth so that we are able to have consistent and improved performance in all financial and efficiency parameters," he said.

The bank's scrip closed at Rs 48.70 apiece, down 3.66 per cent on BSE.