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When T Latha, the MD and CEO of Dhanlaxmi Bank, took over the reins of the crisis-ridden bank in July 2018, she had some definite plans to turn around the 90-year-old institution.
Her efforts – with the collective support of the entire banking team – have borne fruit, putting the worst behind the bank. The bank recorded profits in the last two consecutive quarters, with PAT of ₹16.90 crore in Q3, compared to ₹21.74 crore loss in the corresponding period of the previous fiscal. She is now confident of achieving an 8-10 per cent growth in business in the current fiscal, with a clear focus on retail growth, both in assets and liabilities.
During a brief chat with BusinessLine , she spoke on the initiatives taken to enhance the business, as well as strengthening the monitoring mechanism to arrest fresh slippages. Excerpts:
How did net profit
increase this quarter?
In the third quarter, operating profit increased by 38.96 per cent and net profit by 177.69 per cent. Both net interest income and non-interest income also increased by 8.92 per cent and 24.87 per cent, respectively. We could improve the net interest income through proper liability management. Our efforts to recover from written-off accounts also led to a pick-up in total income. Further reduction in provision requirement for NPA accounts due to effective recovery/monitoring measures, and reduced provision requirement for investment portfolio, supported the increase in net profit.
Why has gross NPA increased?
Gross NPA rose to 8.11 per cent of total advances from 6.96 per cent. It increased slightly due to stress in a few accounts in last three quarters. However, the net NPA is at the same level. To reduce gross NPA we strengthened the monitoring mechanism, which helped to control fresh slippages. However, there is no particular sector responsible for the increase in gross NPA.
How did net NPA
has come down?
Net NPA declined to 2.93 per cent from 4.08 per cent a year ago. This was due to the recovery. Moreover, we have strengthened and streamlined the entire recovery and monitoring process and, reviewed regularly, at various levels, to improve the effectiveness.
What are your plans
for this quarter?
The bank intends to improve the business by concentrating on retail growth, both in assets and liabilities. NPA reduction is another focus area, besides improving non-interest income. We have formed marketing teams in all regions to source credit business. Our main focus will be on gold loans, retail loans, business loans, and MSMEs. We have very strong business in the micro finance sector, and have come out with specific products to facilitate women customers. We also support women through self-help groups. We introduced a new loan product, based on GST returns, to offer speedy solutions for the working capital requirements of MSME customers by way of overdraft.
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