Karnataka Bank Q2 net down 5.3% to Rs 106 cr as bad loans go up marginally; lender's income rises

  • The asset quality of the bank showed a slight blip as gross NPAs rose to 4.78% of the gross advances as on 30 September

  • The bank clocked a total business of Rs 1,23,658.07 crore, registering a year-on-year growth of 8.61%

  • The operating profit has grown at 16.02 percent and the fee-based income at 38.68%

New Delhi: Karnataka Bank on Tuesday reported a 5.3 percent fall in net profit at Rs 105.91 crore for the second quarter ended September of the current fiscal as bad loans increased marginally.

The private sector bank had posted a net profit of Rs 111.86 crore in the corresponding July-September quarter of the previous fiscal ended March 2019.

The bank's total income rose to Rs 1,938.40 crore during September quarter of 2019-20 as against Rs 1,653.81 crore in the year-ago period, the bank said in a regulatory filing.

 Karnataka Bank Q2 net down 5.3% to Rs 106 cr as bad loans go up marginally; lenders income rises

Representational image. Reuters.

The asset quality of the bank showed a slight blip as gross non-performing assets (NPAs) rose to 4.78 percent of the gross advances as on 30 September, up from 4.66 percent a year ago.

In absolute value terms, gross NPAs stood at Rs 2,594.27 crore as against Rs 2,371.62 crore.

Similarly, net NPAs or bad loans rose to 3.48 percent (Rs 1,863.11 crore) from 3 percent (Rs 1,497.68 crore) a year ago.

The provisions for bad loans and contingencies too were raised to Rs 262.40 crore for July-September from Rs 193.22 crore in the corresponding quarter of 2018-19.

Provision coverage ratio as on 30 September stood at 59.19 percent (57.49 percent as on 30 September 2018), the bank said.

The bank clocked a total business of Rs 1,23,658.07 crore, registering a year-on-year growth of 8.61 percent. Deposits rose to Rs 70,189.65 crore, up 9.87 percent, it said.

Even though the external business environment is not found very conducive for business, the bank has been able to post a satisfactory performance by focusing on operational efficiency.

As a result, during the current quarter, the operating profit has grown at 16.02 percent and the fee-based income at 38.68 percent. The low-cost current and savings account (CASA) funds constituted 27.41 percent of the deposits, it said.

"Going forward, the bank will focus more on CASA augmentation, credit growth with special focus on retail and mid-corporates, asset quality by concentrating on timely recovery and by preventing further slippages. Thus bank is optimistic of growth prospectus in the days to come with its customer-centric approach," Karnataka Bank Managing Director & CEO Mahabaleshwara M S said.

Shares of Karnataka Bank closed 0.14 percent lower at Rs 70.60 on the BSE on Tuesday.

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Updated Date: Oct 15, 2019 17:42:36 IST