Kerala Financial Corporation (KFC) has registered the highest ever profit of Rs 45.65 crore for 2011-12.

It also declared a dividend of 7.5 per cent at the annual general meeting held here on Wednesday.

ASSET SIZE

This translates into Rs.15.90 crore, with a major part going to the state government, which owns more than 97 per cent of the equity capital.

Another Rs 2.58 crore is payable to the central government in the form of dividend tax.

KFC managed to increase the size of assets to Rs 1,240 crore as on March 31, 2012 (Rs 1,124 crore a year ago), says Mr Yogesh Gupta, chairman and managing director.

Total income crossed Rs 200 crore-mark to Rs 214.25 crore up from Rs165.98 crore a year ago. Sanctions amounted to Rs 539 crore and disbursements Rs 464.57 crore.

ECONOMICAL RATES

According to Mr Gupta, KFC managed to put up this performance despite reduced financial assistance from Small Industries Development Bank of India (Sidbi).

Improved performance and confidence in its management ensured that banks lent money to KFC at ‘very economical’ rates.

Cut back in its establishment costs also helped; the higher profit was despite keeping low onward-lending rates.

The effective rate, after rebate and allowance for good credit-rating, is only 12.5 per cent as against around 16 per cent charged by most banks, Mr Gupta said.

ASSET QUALITY

KFC has a capital adequacy ratio (CAR) of 20.51 per cent, which is far above the minimum norm of nine per cent prescribed by the RBI.

Mr Gupta said that improvement in appraisal methods and introduction of objective credit rating system have helped raise the quality of its assets and advances.

Gross non-performing assets (NPA) have been brought down to 3.60 per cent from as high as 8.20 per cent a year ago. Net NPAs are down to 1.30 per cent.

Scientific, rational and modern policies for sanction of loans, their monitoring and recovery ensured recoveries touch an all-time high of Rs 467.17 crore.

> vinson.kurian@thehindu.co.in

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