- Group net loss almost double of what analysts' estimated
- Co. made provisions of 25 billion rupees for stressed assets
IDFC Ltd. posted almost double the loss estimated by analysts after the company, which started general banking operations this month, made one-time provisions for stressed assets.
The Mumbai-based firm reported a group net loss of 14.7 billion rupees ($224.8 million) for the three months ended Sept. 30, compared with a profit of 4.21 billion rupees a year earlier, according to an exchange filing on Saturday. That’s higher than the 7.7 billion-rupee mean loss estimated by analysts in a Bloomberg survey.
IDFC and Bandhan Financial Services Pvt won the first new Indian banking licenses awarded in a decade in April 2014. They were given 18 months to fulfill certain requirements before opening their branch networks. IDFC made provisions of 25 billion rupees for stressed assets in the six months to Sept. 30, the filing showed. That was to meet the Reserve Bank of India’s guidelines as the company started operations of IDFC Bank Ltd. on Oct. 1.
IDFC is “likely to report a loss owing to a significant one-time provisioning,” Morgan Stanley analysts including Mumbai-based Sumeet Kariwala, wrote in an Oct. 9 report. “Even other line items are likely to be volatile, this being the last reported quarter before the bank starts operations.”
Shares of IDFC Bank Ltd. are expected to list on Indian stock exchanges from Nov. 6. IDFC’s stock has slumped 24 percent in 2015, compared with a 3.1 percent drop in the benchmark S&P BSE Sensex.