Dena Bank has posted a net profit of Rs 72.91 crore for the financial year 1996-97, showing a 41 per cent increase. The board of the bank has recommended a 12 per cent dividend to the shareholders.
The bank has also transferred a sum of Rs 170.98 crore to its reserves. The capital adequacy stood at 10.81 per cent at the end of the last fiscal.
The bank appears to have bucked the trend of the banking industry by posting an impressive 18.87 per cent growth in advances. Total advances stood at Rs 4,043.73 crore at the end of 1996-97. The total deposits also grew an impressive 21.38 per cent to stand at Rs 7,861.31 crore.
Ramesh Mishra, chairman and managing director, Dena Bank said, "We have targeted a 25 per cent deposit and advances growth in the current financial year."
He added the bank was celebrating its diamond jubilee and has declared 1997-98 as the Marketing Year.
The net non performing assets (NPA) of the bank stood at Rs 394 crore. As a percentage to total advances it has gone up from 7 per cent at the end of 1995-96 to 9.4 per cent. The gross NPA of the bank stood at 15 per cent.
When queried on the increase in the NPAs Mishra blamed it on adverse economic environment and the downswing in industrial conditions. The bank did not have to provide for any depreciation this year. It has taken advantage of the excess depreciation to mark 70.17 per cent of its investments to the market.
While the yield on advances has improved from 13.51 per cent to 14.51 per cent, the return on assets has also improved from 0.62 per cent to 0.75 per cent. Yields on investment increased by 107 basis points to 12.48 per cent.
The bank plans to get into the areas of leasing and housing finance. It has increased the computerized branches to 252 during the year. It has also engaged the services of KPMG Peat Marwick to suggest measures to
strengthen its organisational structure.
Interest rates seen dipping
Ramesh Mishra, chairman and managing director, Dena Bank, believes that the interest rates could be headed down if the credit off take continues to exhibit sluggishness. He also pointed out that the banks will be forced to slash their deposit rates if the impressive deposit growth persists.
