Riding on good growth in treasury income, Mangalore-based Karnataka Bank has reported a 37 per cent increase in net profit at Rs 83.14 crore for the fourth quarter ended March 31, 2009, compared with the corresponding period of 2007-08.
During the quarter, total income rose 35 per cent to Rs 641.8 crore as it earned an interest of Rs 498 crore, up 19 per cent. Boosted by a healthy profit of Rs 66 crore by the sale of government securities and bonds, the bank has reported a 2.5 times growth in other income during the quarter.
On an annual basis, the bank’s bottom line has grown 10.3 per cent to Rs 241.74 crore. Advances during the year grew by close to 9 per cent to Rs 11,810 crore, while deposits grew by Rs 32,143 crore, a growth of 19.5 per cent. Total business turnover increased 15.3 per cent to Rs 32,143 crore and the bank is aiming to raise it to 21 per cent during the current financial year.
According to company officials, the operating profit rose almost 23 per cent to Rs 480 crore, while the gross income was up 26 per cent to Rs 2,270 crore. Net non-performing assets stand at 0.98 per cent, while its capital adequacy ratio is at 11.48 per cent under Basel II and 13.54 under Basel I. Return on assets stood at 1.25 per cent.
Karnataka Bank is also looking to restructure around Rs 350 crore of its advances, which has been made towards real estate and textile sectors.
The bank intends to take sector-specific measures and may offer extension of repayment period by two more years for a five to seven year loan account depending on the interest burden of each borrower and the repayment capacity.
Currently, 7 per cent of the total lending is towards real estate and 15 per cent towards textiles. The bank has decided not to extend any fresh loans to them.
As on March 31, 2009, total advances stood at Rs 11,800 crore. Of this, 14 per cent is towards small and medium enterprises, 7 per cent real estate, 15 per cent textiles, 40 per cent priority sector and the balance towards corporate sectors.
