The IDBI board, which met in Mumbai on Friday to finalise the accounts, proposed a dividend of Rs 4.50 on a share of Rs 10 against Rs 3.50 in the previous fiscal.IDBI's gross profit registered a 20.3 per cent increase to Rs 1,972 crore (up from Rs 1,633 crore). After providing for Rs 167 crore (Rs 100 crore) on account of provisioning of bad loans and write-offs and Rs 299 crore (Rs 401 crore) towards tax, the term-lending institution's net was pegged at Rs 1501 crore.

The IDBI stock, which opened at Rs 100.60 on the Bombay Stock Exchange, touched a low of Rs 98 before closing at Rs 99, losing Rs 2.90 from Thursday's close of Rs 101.90.

"No otherinstitution can match IDBI's growth in net profit and assets. These are the two major parameters to judge the performance of a financial institution, and we have proved that we are the best," chairman Khan announced at a press conference immediately after the board meeting.

The obvious reference was to the Industrial Credit & Investment Corporation of India, which had overtaken IDBI both in terms of sanctions and disbursements in 1997-98.

Industrial Development Bank of India's total assets increased by 19.1 per cent to Rs 59,957 crore as on March 31, 1998, and its net worth rose by 13.7 per cent to Rs 8.003 crore.

Khan attributed the profit growth to two factors: growth in sanctions and disbursements and reduction in the cost of borrowing. Overall sanctions of the institution grew by 41.9 per cent in 1997-98 at Rs 24,198 crore while disbursements grew by 32.6 per cent at Rs 15,165 crore. "The marginal cost of borrowing went down by 3 percentage points during the year," Khan said. Consequently, the netspread went up from 3.7 per cent in 1996-97 to 3.9 per cent in 1997-98.

The Industrila Development Bank of India's non-performing assets (NPA) grew by Rs 736 crore -- from Rs 4,365 crore to Rs 5,101 crore -- in absolute terms. However, since the asset growth was healthy during the year, in percentage terms, there was a marginal fall in net NPAs -- from 10.3 per cent to 10.1 per cent."

Bulk of these NPAs belongs the substandard category," Khan said.

The highlights of the Industrial Development Bank of India''s performance in 1997-98 include the raise in return on average assets from 2.4 per cent to 2.7 per cent, return on average net worth from 17 per cent to 19.9 per cent and the earnings per share from Rs 16.76 to Rs 22.30. Book value per share also rose from Rs 105.76 to Rs 118.90 in 1997-98. Its capital adequacy ratio 13.7 per cent in March 1998, down from 14.7 per cent in the previous year.IDBI raised Rs 15,167 crore as resources in 1997-98, the bulk of which (Rs 13,287 crore) was rupee borrowings.The institution has fixed the borrowing target at Rs 18,000 crore in the current fiscal. "We would like to achieve an asset growth of 22 per cent in 1998-99. Even though our asset growth was 19 per cent last year, growth in direct financing was to the tune of 22 per cent. We will be able to maintain the growth rate," Khan said.

The Industrial Development Bank of India chief is banking on infrastructure financing for the asset growth in the current fiscal. "1997-98 was the year of infrastructure financing, which accounted for 34 per cent of the total sanctions. "It will continue to hog the limelight in this fiscal as well," Khan said.