Shedding high-cost deposits will help boost profits in the coming quarters: CMD
Corporation Bank’s net profit rose 1.1 per cent to Rs 405.71 crore in the second quarter ended September from Rs 401.11 crore in the corresponding period of the previous fiscal.
The net interest income (NII) stood at Rs 803.25 crore (Rs 743.60 crore), and the ‘other income’ came down to Rs 325.96 crore (Rs 389.38 crore).
Speaking to Business Line over phone from Mumbai, Ajai Kumar, Chairman and Managing Director, Corporation Bank, said the bank had performed well despite the difficult economic situation and high interest rates leading to defaults and creation of more NPAs (non-performing assets).
He hoped that the profitability will be much better in the coming quarters, as the bank is getting out of all the high-cost deposits, most of which by this month. “By March, my bulk deposits will be around 15 per cent. With this, I am pretty sure that the profitability will be much better in the next and the coming quarters,” he said.
Yield on advances rose to 11.75 per cent (11.46 per cent) during the quarter, despite the interest rate having been brought down, he said.
Gross NPAs stood at 1.97 per cent (1.32 per cent), and net NPAs, at 1.38 per cent (0.91 per cent).
The Chairman said the bank has been able to contain and maintain its asset quality. During the second quarter, the slippage was hardly Rs 400 crore; in the previous quarter, it was about Rs 700 crore.
The bank effected cash recovery and upgradation of NPAs of Rs 510.09 crore during the first six months of this fiscal (Rs 250.48 crore in the same period of the previous year).
Provisions (other than tax) and contingencies increased significantly to Rs 268.82 crore (Rs 195.40 crore) during the second quarter. The NPA provision coverage ratio stood at 60.44 per cent.
On Friday, the bank’s shares closed at Rs 401.15 on the BSE, down 0.74 per cent, against the previous close of Rs 404.15.