The Hindu Business Line : Dena Bank Q3 net dips on NPA provisioning

Robust credit demand: Mr P.L. Gairola (left), Chairman & Managing Director, Dena Bank, and Mr U.S. Kohli, Executive Director, at a press conference in Mumbai on Friday. - Shashi Ashiwal

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Mumbai Jan. 19 Dena Bank's net profit dropped by around 15 per cent to Rs 70.53 crore in the quarter ended December 31, 2006, against Rs 83.18 crore in the corresponding year-ago period, due to higher provisions for non-performing assets. "We could have shown higher profit but our objective during the quarter was reduction and writing-off NPAs," said Mr P.L. Gairola, Chairman and Managing Director, Dena Bank.

The total income increased to Rs 693.46 crore against Rs 602.27 crore last quarter. Net NPAs dipped to 2.47 per cent (3.37 per cent). "For the nine months ended December 31, 2006, the total recovery was around Rs 275 crore and write-offs were about Rs 237 crore," said Mr Gairola.

For the quarter, the write-offs of NPAs were at Rs 139 crore and recovery at over Rs 146 crore. The bank tries to keep its write-offs lower than recoveries, he said at a press conference here. The bank hopes to bring its net NPAs to 1.5 per cent in the near future. Provisions and contingencies increased by 21.29 per cent to Rs 145.34 crore (Rs 119.83 crore).

The total deposits were up 18.19 per cent Its gross advances increased by 27.87 per cent. Retail credit and SME credit were up by 61.38 per cent and 31.56 per cent, respectively. Priority sector advances have increased by 23.59 per cent to Rs 6,979 crore and forms 41.5 per cent of the net bank credit. "Despite rising interest rates, credit demand has been robust and we will be able to maintain growth," said Mr Gairola.

Net interest income was marginally up at Rs 209.79 crore (Rs 203.58 crore). Net interest margin was down at 3.15 per cent (3.43 per cent).

The bank's scrip closed at Rs 39.3, down from its previous close of Rs 40.50.

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