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Our Bureau

Mangalore, May 19 Karnataka Bank posted a net profit of Rs 241.74 crore during 2007-08 as against Rs 177.03 crore in 2006-07, a growth of 36.55 per cent. The operating profit stood at Rs 390.50 crore (Rs 356.58 crore)

The board of directors has proposed a dividend of 50 per cent as against 35 per cent last year.

The bank recorded a net profit of Rs 60.78 crore during the fourth quarter of 2007-08 (Rs 26.76 crore).

Speaking to Business Line after the board meeting here on Monday, Mr Ananthakrishna, Chairman and Chief Executive Officer of the bank, attributed this growth in net profit to increase in other income.

He said higher fee-based income and profit on investments helped register a growth of around 30 per cent in other income during 2007-08. The profit on investment was maintained at Rs 60 crore each in the last and the previous fiscals. Improvement was there in the distribution channel for selling third party products such as mutual funds and insurance, he said, adding that there was an overall improvement in the fee-based income.

Mr Ananthakrishna said that the bank did not go aggressively for mobilisation of bulk deposits. The CASA (current account saving account) stood at around 22 per cent and bulk deposits at 14 per cent. Retail deposits constituted the remaining portion. The bank witnessed a growth of 21.22 per cent in deposits during 2007-08. The cost of deposits stood at around 7 per cent.

Stating that advances have spread across all sectors evenly, he said: “We consciously took this decision on advances, because we wanted to have an even spread of the total portfolio, instead of concentrating on a particular segment.” Yield on advances stood at 11.29 per cent. The total business turnover crossed Rs 27,858 crore during 2007-08.

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