The Hindu Business Line : Corporation Bank Q1 net rises on higher volumes

New Delhi, July 14 The increase in cost of deposits and its consequent pressure on operating margins notwithstanding, Corporation Bank on Saturday reported a 22.79 per cent rise in net profit for the first quarter ended June 30, 2007 at Rs 177.11 crore compared with Rs 144.24 crore recorded in the same quarter last year.

“Most of our net profit this quarter came from our core banking operations. The growth in net profit is mainly due to higher volumes. Our margins are under pressure. We are not able to pass on increase in cost of deposits fully to the borrowers,” Mr B. Sambanurthy, Chairman and Managing Director of Corporation Bank, told Business Line after a meeting of the board of directors here today.

The board met here for considering and adopting the first quarter results of the bank.

Total income of the bank for the quarter under review increased by 38.4 per cent to Rs 1,238.83 crore compared with Rs 895.11 crore in the same quarter last year.

The first quarter also saw sharp decline in certain provisions and contingencies at Rs 19.95 crore (Rs 83.81 crore).

Operating profit for the quarter stood at Rs 275.56 crore, lower than Rs 301.55 crore recorded in the same period last year.

Net interest margin during the quarter stood at 3.01 per cent, lower than that recorded in the same quarter last year.

“Although our net interest margin in percentage terms was lower this quarter (on a year-on-year basis), our net interest income in absolute terms was much higher due to higher volumes,” Mr Sambamurthy said.

Softening of rates

On interest rate outlook of the bank for the next few months, Mr Sambamurthy said that he sees signs of softening of rates.

“They will not harden further. The bias is towards softening,” he added.

Mr Sambanurthy also said that the bank’s credit growth rate would be at least 20 per cent this fiscal.

Lending scenario

“It is my expectation that retail lending will pick up. SME credit is also growing fast and there is good demand for loans from infrastructure projects. We will lend to infrastructure projects to the extent it does not upset our asset-liability management,” the CMD said.

While aggregate deposits of the bank increased by 27.37 per cent from Rs 33,940 crore as on June 30, 2006 to Rs 43,231 crore, advances grew 17.53 per cent from Rs 25,825 crore to Rs 30,351 crore as on June 30, 2007.

More Stories on : Financial Performance | Public Sector Banks

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Corporation Bank Q1 net rises on higher volumes

Allahabad Bank Q1 net up 56%

Road caution: 38 m non-insured vehicles added every year

IDBI Bank, Sumitomo tie up for carbon credits

Chidambaram to meet PSB chiefs on Aug 1

Vijaya Bank to open overseas branch shortly