The improvement in asset quality and credit growth have helped Karnataka Bank record 27.52 per cent growth in its net profit during the third quarter of this fiscal (2017-18).

The bank registered a net profit of ₹87.38 crore in Q3 FY18 as against ₹68.52 crore in the corresponding year-ago period.

Speaking to BusinessLine , Mahabaleshwara MS, Managing Director and CEO of the bank, said the gross non-performing assets (GNPA) of the bank came down to 3.97 per cent from 4.30 per cent in the corresponding period of the previous year.

The bank was able to contain slippages which, he said, helped bring down the NPA ratio during the quarter. The net NPA of the bank stood at 2.85 per cent (2.99 per cent in Q3 FY17).

Provisions (other than tax) and contingencies stood at ₹196.40 crore (₹100.60 crore).

‘Other income’ Mahabaleshwara said that the bank’s earnings had improved on account of, among others, healthy growth in other income and interest income. Though provision pressure was there, the bank had adequate amount to provide for the same, he said.

The net interest income (NII) and other income of the bank stood at ₹451.48 crore (₹376.52 crore) and ₹194.62 crore (₹133.59 crore), respectively.

He said the bank witnessed a credit growth of 24.1 per cent during the third quarter at a time when the average credit growth in the banking sector was at 10 per cent.

“As a result, our credit-deposit (CD) ratio also went up to 76.87 per cent,” he said, terming it as a ‘historic high’.

On the outlook for the year, he said: “We are optimistic about sustaining the credit growth, containing the slippages and optimising the profit. Today’s result is indicative of the fact that the bank is on the right track and in the right direction,” he said.

On Friday, the Karnataka Bank scrip closed at ₹167 on the BSE, up 2.64 per cent, against the previous close of ₹162.70.

comment COMMENT NOW