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Karnataka Bank Ltd recorded a net profit of Rs 38.59 crore in the third quarter of the 2010-11 as against Rs 36.61 crore in the corresponding period of the previous fiscal, registering a growth of 5.40 per cent during the period.
Speaking to Business Line after the board meeting on Monday, Mr P. Jayarama Bhat, Managing Director and Chief Executive Officer of the bank, said that there is an increase of around 22.33 per cent in the net profit for the nine months period. The net profit for first nine months of the fiscal stood at Rs 113.79 crore (Rs 93.02 crore).
NPA provisioning
Asked about the reason for flat growth in third quarter, he said provisioning for NPA, depreciation in investments, and tax provision on operating surplus were the reasons for this.
On the NPA provisioning, he said: “The coffee advances were treated as standards in September. But on account of restructuring, as per the package, RBI has confirmed that it should be treated as NPA. To that extent around Rs 40 crore of coffee advances became NPA and for that we had to provide. For coffee advances we made provisioning and we saw that 70 per cent provision coverage ratio is reached.”
The operating surplus during the nine months period increased from Rs 168 crore in 2009-10 to Rs 263.95 crore. “So we had to provide for tax,” he said.
Interest & Deposits
The net interest income (NII) of the bank stood at Rs 161.42 crore (Rs 103.16 crore), and other income stood at Rs 65.31 crore (Rs 62.19 crore) during the quarter.
Stating that the NII has increased by 104.74 per cent for the nine months period, he said it went up from Rs 205.12 crore to Rs 419.96 core. With this, NIM increased to 2 per cent (1.12 per cent).
The cost of deposits was around 6.91 per cent (7.88 per cent), and yield on advances was 10.78 per cent (11.39 per cent) during the period under review.
The deposits of the bank stood at Rs 25,424 crore (Rs 22,307 crore) and advances at Rs 16,282 crore (Rs 13,233 crore).
On a year on year basis, the business turnover of the bank increased to Rs 41,706 crore from Rs 35,540 crore registering a growth of 17.35 per cent.
The CASA deposits of the bank stood at 24.90 per cent (21.96 per cent).
On Monday, the scrip of Karnataka Bank closed at Rs 150.90 on BSE against the previous closing of Rs 149.95.
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