Karnataka Bank net profit jumps to Rs 88.46 cr

Lesser provisioning and tax benefits helped Karnataka Bank record a 205.56 per cent growth in net profit in the second quarter of 2014-15.

The bank’s net profit rose to ₹88.46 crore from ₹28.95 crore in the corresponding year-ago period.

Provisions (other than tax) and contingencies came down to ₹83.64 crore (₹126.71 crore).

Speaking to

BusinessLine , P Jayarama Bhat, Managing Director of the bank, said there was lesser provisioning on investments and NPAs (non-performing assets) during the quarter, and the bank also received tax benefits.

The tax expense of the bank was ₹15.98 crore in the second quarter. However, it received a tax benefit of ₹9.48 crore during the period.

During the quarter, net interest income (NII) rose to ₹297.27 crore (₹284.54 crore), and other income to ₹102.77 crore (₹87.80 crore).

During the quarter, the gross NPA ratio of the bank stood at 3.53 per cent (3.59 per cent), and net NPA ratio at 2.37 per cent (2.25 per cent). Bhat said the bank wants to reduce NPAs considerably in the third quarter.

“I am expecting gross NPAs to come down to around 2.5 per cent,” he said.

On the outlook for the coming quarters, he said the bank wants to increase the growth in advances from 12.27 per cent in the second quarter to 18 per cent in the third quarter.

The ratio of corporate advances to retail advances is 51:49. “Going forward we want to have a ratio of 45:55,” he said.

On Friday, the Karnataka Bank scrip closed at ₹123.85 on the BSE, up 3.38 per cent over the previous close.