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Our Bureau

Mr K. Cherian Varghese (left), Chairman & MD, Corporation Bank, with Mr P.K.Gupta, ED, at a press conference in Mumbai on Wednesday. -- Paul Noronha

Mumbai , Jan. 14

LOWER treasury income coupled with increased provisioning has led to a 25.38-per cent dip in the net profit of Corporation Bank Ltd for the third quarter ended December 31, 2003.

The bank recorded a net profit of Rs 113.28 crore during the third quarter compared to a net profit of Rs 151.81 crore in the corresponding period the previous year.

Addressing a conference here on Wednesday, Mr Cherian Varghese, Chairman and Managing Director, said the profit on sale of investments recorded only a marginal growth in the nine-month period ended December 31, 2003, at Rs 222.3 crore compared to Rs 215 crore in the previous year. "The core business of the bank has recorded a 34-per cent growth," he said.

Corporation Bank has decided to pay an interim dividend of 30 per cent taking into account the continued good performance during the year, said Mr Varghese.

The total income of the bank during the third quarter was lower at Rs 673.57 crore (Rs 693.14 crore). This is inclusive of interest earned at Rs 561.46 crore (Rs 539.50 crore) and other income at Rs 112.11 crore (Rs 153.64 crore).

The total expenditure was at Rs 437 crore (Rs 424.07 crore). This is inclusive of interest expended at Rs 293.70 crore (Rs 303.43 crore) and operating expenses at Rs 144.25 crore (Rs 120.64 crore). Net provisions and contingencies increased to Rs 72.22 crore (Rs 43.55 crore). Of this, provisioning for non-performing assets of the bank was at Rs 63.75 crore (Rs 35 crore).

For the nine-months ended December 31, 2003, the bank recorded a net profit of Rs 384.64 crore (Rs 368.72 crore).

The bank's net worth stood at Rs 2,755 crore as on December 31, 2003, compared to Rs 2,750 crore in December 31, 2002.

The cost of deposits of the bank has been brought down to 5.53 per cent from 6.73 per cent. "In spite of adopting the 90-day norm the bank's NPA levels have been contained at Rs 198.12 crore as on December 31, 2003, compared to Rs 244 crore on December 31, 2002," said Mr Varghese.

During the first three quarters of the financial year, the bank could recover a sum of Rs 68.86 crore in non-performing accounts.

Even with the adoption of 90-day norm for NPAs, the percentage of net non-performing advances has been reduced to 1.69 (2.39).

The aggregate deposits of the bank increased to Rs 22,076 crore as on December 31, 2003, from Rs 20,458 crore in the corresponding period the previous year. Net advances increased to Rs 11,746 crore (Rs 10,210 crore).

The bank has also fixed its benchmark PLR at 10.50 per cent, which is one per cent lower than its earlier PLR at 11.50 per cent.

The bank plans to shift focus to enhance lending to retail and small businesses. "We will continue to lend to corporates, but our focus in the near future will be retail," he added.

The capital adequacy ratio of the bank is at 23.70 per cent (21.66 per cent).

More Stories on : Financial Performance | Public Sector Banks

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