The merger-bound ING Vysya Bank today reported a 13 per cent decline in net profit at Rs 145.7 crore for the October-December quarter due to sluggish non-interest income, and a spike in provisions.
The Bangalore-based bank, which is in the process of being merged with larger rival Kotak Mahindra Bank in a Rs 15,000-crore all stock deal, had reported a post tax net of Rs 167.34 crore in the year-ago period.
Its chief financial officer Jayant Mehrotra said its fees is generally based on deals or transactions, and a lull on that front was the primary reason behind a 4.2 per cent decrease in other income at Rs 205.6 crore.
There was also an Rs 18-crore hit taken on account of rise in provisions due to an increase in retirement benefits for the unionised staff, due to a correction in the benchmark yields, he said.
On an annual basis, the outgo will work out to around Rs 25 crore, he added.
The bank was also not able to capitalise on the lowering in yields for treasury profits as its peers have reported in the quarter, as it does not have a big investment book.
Meanwhile, on the merger process, deputy chief executive Uday Sareen said the bank is in the process of getting regulatory approvals and expressed confidence on meeting the April 1 target announced at the time of the merger.
Mehrotra said the core net interest income has grown as per the balance sheet expansion at 18 per cent to Rs 491.6 crore, while it was able to maintain its net interest margin at 3.37 per cent.
