The Mangalore-based Corp-oration Banks net profit has jumped by 19.5 per cent to Rs 125 crore in 1996-97 from Rs 104.75 crore last year.Gross profits moved up by Rs 29 crore to Rs 245.95 crore (Rs 216.1 crore).
It paid a 30 per cent dividend of Rs 25.03 crore on a paid-up capital of Rs 82 crore. It has provided Rs 83 crore against income-tax, which together with the return of capital of Rs 30 crore with interest amounting to Rs 5.94 crore takes the total payment to Rs 144 crore.
The thrust was on stringent asset liability management and a focused growth on credit expansion which helped the bank in strengthening its bottomline. Moreover, we have quality assets which can be seen from a low net NPA ratio of 3.63 per cent, said R S Hugar, chairman and managing director, Corporation Bank.
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The bank has provided Rs 35 crore against NPA including the outstanding balances of less than Rs 25,000 per borrower as per the asset classification norms.
The bank adopted a flexible approach for deployment of its assets as interest rates decreased in the financial year. Short-term funds were deployed in short-term assets, said Hugar.
The bank mobilised deposits worth Rs 6,600 crore , excluding CDs against Rs 5,700 crore in the previous year. Borrowing cost through CDs was at 12.4 per cent and the average borrowings during the year was Rs 160 crore. Its borrowing cost as on March 31 was Rs 90 crore. The bank improved its interest spreads to 4.7 per cent as against 4.6 per cent the previous year. This has been achieved despite maintaining the cost of deposits at 8.3 per cent.
The credit portfolio of the bank increased to over Rs 3,000 crore during the financial year 1996-97 from Rs 2,400 crore a year back. However, the banks investment portfolio at Rs 3,200 crore (Rs 2,100) also moved up in tandem with advances
Depreciation on investments, which enabled the bank to increase the yield on investments to 12.8 per cent from 12.2 per cent, amounted to Rs 2.38 crore. The yield on advances during the period stood at 15.3 per cent. The bank has marked nearly 83 per cent of its investments in gilts portfolio in current category of investments.