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Karur Vysya Bank’s fourth quarter net profit slipped 24.59 per cent on higher risk provisioning compared to the earlier fiscal. The net profit dipped to ₹119.59 crore in the quarter ended March 31, 2014, from ₹158.58 crore in the corresponding year-ago quarter.
Commenting on the performance, the bank’s Chief Executive K Venkataraman said: “We did not want to compromise on asset quality. In fact, we started providing for substandard accounts even from the first quarter of last year. And in a situation where credit demand is low, we have to be extra cautious on advances.”
“We look for higher quality assets with better rating and this is not easy, for not all companies are rated,” he told Business Line .
Besides providing for such accounts, the bank also had to make a provision for wage arrears and employee stock options. “This further impacted our operating profit,” he said.
The bank’s Q4 operating profit fell 12.74 per cent to ₹209.29 crore (₹239.86 crore). The net interest income however, grew 12.25 per cent to ₹348.33 crore (₹310.33 crore).
“Sentiments seem better but real growth at the ground level is not happening yet. We expect to be better off, going forward,” Venkataraman said.
Gross NPAs (non-performing assets) fell to 0.82 per cent (0.96 per cent), while net NPAs increased marginally to 0.41 per cent (0.37 per cent).
The board has recommended a dividend of ₹13 a share (130 per cent) for fiscal 2013-14.
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