Karur Vysya Bank has reported a net profit of ₹115.76 crore in the third quarter of the current fiscal, down 24 per cent from the ₹152.83 crore recorded in the corresponding period of the previous fiscal.
The bank’s Chief Executive Officer K Venkataraman said demonetisation impacted credit growth, while resulting in higher-than-usual growth in current account, and savings account (CASA) deposits.
“CASA jumped from 25 per cent to 30 per cent. This helped reduce our cost of funds. We have deployed the amounts in short-term funds. This, we believe, is a passing phase, as cash flows have already started to improve,” the CEO said.
The bank’s aggregate business stood at ₹93,525 crore, up from ₹85,208 crore a year ago. Deposits increased to ₹55,066 crore from ₹47,336 crore while gross advances moved up marginally to ₹38,459 crore from ₹37,872 crore. Net interest margin (NIM) rose to 3.68 per cent from 3.47 per cent in the corresponding quarter of the earlier fiscal. The ratio of gross non-performing assets (NPA) to gross advances increased to 2.66 per cent from 1.91 per cent, and the net NPA to 1.68 per cent from 0.96 per cent.
Operating profit for the nine-month period slipped 10.47 per cent to ₹874.34 crore (₹976.54 crore).
Demonetisation fallout Venkataraman told BusinessLine that the bank had, in the just-concluded quarter, incurred huge expenses in moving cash from chests to branches due to the restrictions placed on cash withdrawals.
“We have 17,100 ATMs, but were not able to run all of them in the aftermath of the demonetisation move. Our customers therefore started using the ATM network of other banks. This resulted in higher interconnect charges (over and above the cost incurred in transportation of cash).
“Normally, our receivables from the ATM network used to be higher. But in the last two months of the last calendar year, we incurred a loss of ₹14 crore as many of our ATMs were not functional.”