Amid demonetisation blues, Lakshmi Vilas Bank (LVB) has reported a healthy growth in profit and strong recoveries in the third quarter of this fiscal.

For the quarter ended December 31, 2016, the bank’s net profit grew 70 per cent to ₹78.38 crore from ₹46 crore in the year-ago quarter, supported by lower cost of funds, stable net interest income, and recoveries.

Operating profit rose 62 per cent to ₹171.45 crore (₹105.99 crore in the year-ago period). Other income more than doubled to ₹150.22 crore (₹69.32 crore).

Total income grew 22 per cent to ₹879.26 crore (₹723.05 crore a year ago).

“During the September quarter, the bank reported a bill discounting fraud for a value of ₹75 crore in one of the branches. However, I am delighted to inform that the entire amount, along with the overdue interest, was recovered. Following this, numerous steps have been taken to tighten the systems and processes,” said Parthasarathi Mukherjee, Managing Director and CEO of LVB.

The bank also had to pay a penalty levied by the RBI for the lapse. Provisions for the same were also made.

During the third quarter, there was some stress on asset quality. The bank saw fresh slippages of ₹88 crore. But recoveries were to the extent of ₹81 crore. There was only one major account in the shipping sector that turned bad and the value was ₹45 crore. The next big slippage was below ₹3 crore.

Gross non-performing assets (NPA) as a percentage of gross advances increased to 2.78 per cent from 2.70 per cent in the preceding quarter and 1.80 per cent from Q3 of the previous fiscal.

Net NPAs rose to 1.82 per cent from 1.87 per cent on sequential basis and 0.80 per cent in a year-ago quarter.

During the end of the December quarter, the old private sector bank raised ₹168 crore in equity through qualified institutional placement (QIP).

“This is the first time LVB accessed the market to raise funds. Also, it was raised at the peak of demonetisation when conditions were not stable,” said Mukherjee.