Karnataka Bank recorded a 65.5 per cent rise in net profit to ₹134.42 crore in the fourth quarter of 2014-15 from ₹81.21 crore in the corresponding period of the previous fiscal.

Speaking to BusinessLine here on Friday, P Jayarama Bhat, Managing Director and Chief Executive Officer of the bank, said that there was a 112.39 per cent jump in operating profit during the quarter to ₹189.35 crore (₹89.59 crore).

He attributed the reversal in provisions for investments and employees’ expenses as a reason for this growth.

With regard to employee expenses, the bank had made additional provision of 17.5 per cent earlier. After the wage settlement, it was fixed at 15 per cent. Employees’ cost came down to ₹82.56 crore (₹179.83 crore).

The total reversals in provisions stood at ₹54 crore.

Net interest income came in at ₹291.32 crore (₹249.93 crore), and other income at ₹111.69 crore (₹113.98 crore).

The net NPA stood at 1.98 per cent (1.91 per cent) during the period, and the bank made recoveries worth ₹239.90 crore in Q4.

For the full fiscal of 2014-15, the net profit stood at ₹451.45 crore as against ₹311.03 crore in 2013-14. On the outlook for 2015-16, Bhat said: “I want to reduce the net NPA to 1 per cent, and gross NPA to 2-2.5 per cent during the year.”

Higher dividend Bhat said the bank, which paid a dividend of 40 per cent in 2013-14, has increased it to 50 per cent for 2014-15. The board of directors of the bank has recommended a dividend of ₹5 an equity share of ₹10 each for 2014-15.

Meanwhile, the bank informed the stock exchanges that the board has decided to seek shareholders’ approval for augmenting capital, not exceeding ₹500 crore, through qualified institutional placement.

Base rate to be cut Bhat said the bank has decided to reduce the base rate from 10.75 per cent to 10.5 per cent with effect from June 1.

On Friday, the Karnataka Bank scrip closed at ₹131.90 on the BSE, up 4.19 per cent, against the previous close of 126.60.

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