Money & Banking

Karnataka Bank net profit down by 46%

Our Bureau Mangaluru | Updated on July 27, 2021

Net profit in Q1 of FY2021-22 amounts to ₹106.08 crore

Karnataka Bank Ltd (KBL) registered a net profit of ₹106.08 crore in the first quarter of 2021-22 as against a net profit of ₹196.38 crore in the corresponding period of 2020-21, recording a decline of 45.98 per cent.

Speaking to BusinessLine after the meeting of the Board of Directors on Tuesday, to approve the financial results for quarter ended June 30, Mahabaleshwara MS, Managing Director and Chief Executive Officer of the bank, said KBL continued to be a profitable bank even during the tough times. The reduction in net profit on a year-on-year basis is mainly on account of decline in treasury gains, which is dependent on the yield movements.

Compared to the sequential previous quarter -- Q4 of FY 21 -- the net profit is up by 3.38 times, he said. The net profit was at ₹31.36 crore during fourth quarter of 2020-21. Sequentially, on a quarter-on-quarter basis, the net profit was higher by 238.26 per cent over the fourth quarter ended March 2021, he said.

The net interest income of the bank was at ₹574.79 crore for the quarter ended June 30 as against ₹459.14 crore for Q4 of 2020-21.

NPA declines

“In spite of the Covid-affected economy, the asset quality has improved both in terms of absolute numbers and on percentage basis,” he said. The gross NPA (non-performing assets) of the bank declined to 4.82 per cent as at June 30, compared to 4.91 per cent in the sequential previous quarter of FY 21. The gross NPAs in absolute terms declined to ₹2,549.06 crore during Q1 of 2021-22 from ₹2,588.41 crore in Q4 of 2020-21, and ₹2,557.64 crore in Q1 of 2020-21.

The net NPAs also declined to 3 per cent during Q1 of 2021-22 from 3.18 per cent at the end of Q4 of 2020-21, and 3.01 per cent as at June 30, 2020. In absolute terms, net NPAs declined to ₹1,552.95 crore during Q1 of 2021-22, from ₹1,642.10 crore in Q4 of 2020-21 and ₹1,630.65 crore in Q1 of 2020-21.

“Going forward, the bank will continue to further consolidate on credit, CASA (current account, savings account) and asset quality,” he said.

Capital

The bank may go for augmenting the capital through QIP route, depending on the market condition. Even though the CRAR is comfortable at 14.58 per cent, the decision to go for QIP route was taken mainly with an intention to onboard a few suitable institutional investors, he said, adding the process would be taken forward after the due approval of the shareholders.

On Tuesday, the scrip of Karnataka Bank closed at ₹59.05 on BSE, down 1.17 per cent, against the previous close of ₹59.75.

Published on July 27, 2021

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