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Karnataka Bank recorded a net profit of ₹135.38 crore in the third quarter of 2020-21 against a profit of ₹123.14 crore in the corresponding period of 2019-20, registering a growth of 9.94 per cent.
Speaking to BusinessLine after the meeting of the board of directors to consider the unaudited results of the bank for Q3 on Tuesday, Mahabaleshwara MS, Managing Director and Chief Executive Officer of the bank, said factors such as realignment of advances portfolio, growth in the net interest income, and reduction in expenses helped the bank register growth during the tough times affected by Covid pandemic.
The realignment of advances portfolio towards retail and mid-corporate segments – that is up to ₹5 crore and up to ₹100 crore – has helped it grow by 9.75 per cent during the quarter. Though there was a de-growth of around 40 per cent in the above ₹100-crore advances portfolio, the retail and mid-corporate showed a growth of 9.75 per cent. He said retail and the mid-corporate segment was where it got a better yield on advances.
Net interest income
Following this, net interest income (NII) recorded a growth of 20.94 per cent during the quarter. The NII of the bank stood at ₹614.05 crore during Q3 of 2020-21 against ₹507.75 crore in the corresponding period of 2019-20.
He said CASA (current account savings account) deposits of the bank reached 30.07 per cent during the quarter.
During Q3,the net interest margin of the bank stood at an all-time high of 3.26 per cent, and the provision coverage ratio at 80.51 per cent. He said the capital adequacy ratio was at an all-time high of 13.83 per cent during the quarter. The total expenses were reduced by 4.10 per cent during the period.
Terming it as an encouraging result, Mahabaleshwara said the bank has consistently delivered good result in spite of the tough times. The bank had taken some precautionary and corrective measures such as focussing on the bottom line, realignment of the advances portfolio, and cost reduction measures in March itself, he said.
The gross and net NPA (non-performing assets) of the bank stood at 3.16 per cent (4.99 per cent) and 1.74 per cent (3.75 per cent), respectively, during the quarter.
Stating that there has been good recovery in the technically written-off accounts also, he said the bank recorded a recovery of ₹26.86 crore in the technically written-off accounts during the Q3 of 2020-21 against ₹9.43 crore in the corresponding period of the previous fiscal.
Asked about the future outlook, he said the provision requirement would come down, going forward. “So, definitely we should be able to show a very consistent performance going forward,” he added.
On Tuesday, the scrip of Karnataka Bank closed at ₹67.70 on the BSE, up 5.62 per cent, against the previous close of ₹64.10.