Karnataka Bank Q2 net up 13 pc to Rs 119 cr

PTI, Oct 13, 2020, 7:28 PM IST

New Delhi: Private sector Karnataka Bank on Tuesday reported a nearly 13 per cent rise in net profit at Rs 119.44 crore for the September quarter as bad loans moderated.

The bank had posted a net profit of Rs 105.91 crore in the July-September period of the previous fiscal.

Total income rose to Rs 1,933.52 crore in the quarter under review, against Rs 1,902.41 crore in the same period of 2019-20, Karnataka Bank said in a regulatory filing.

However, the interest income fell to Rs 1,603.71 crore from Rs 1,629.64 crore a year ago. Income from other sources rose to Rs 329.81 crore from Rs 272.77 crore.

The lender witnessed an improvement on the asset quality front, as the gross non-performing assets (NPAs), fell to 3.97 per cent of the gross advances as on September 30, 2020, from 4.78 per cent in the year-ago period.

In value terms, the gross NPAs were down to Rs 2,188.80 crore from Rs 2,594.27 crore.

Net NPAs or bad loans fell to 2.21 per cent (Rs 1,194.60 crore) from 3.48 per cent (Rs 1,863.11 crore).

However, provisions for bad loans and contingencies were raised to Rs 322.13 crore for the September quarter of 2020-21, as compared to Rs 262.40 crore in Q2 FY20.

With regard to provision requirement of 10 per cent against moratorium availing accounts due to the COVID-19 impact, Karnataka Bank said it provided Rs 24.08 crore on such loans for the March 2020 quarter, and Rs 73.91 crore for the June quarter.

The aggregate COVID-19 provision of Rs 97.99 crore has been continued for the period ending September 30, 2020, it added.

The bank has been able to keep the bottom line intact with steady growth in net profit, improve the asset quality significantly and gross and net NPAs decreased to 3.97 per cent and 2.21 per cent respectively, the Bank’s Managing Director and CEO Mahabaleshwara M S said.

Further, the provision coverage ratio has reached an all-time high of 75.44 per cent on account of accelerated prudent provisioning.

The bank has been successful in weathering the impact of COVID-19 as the retail and mid-corporate advances have grown at 8.53 per cent and 16.52 per cent, respectively, and share of CASA (current and savings account) deposits also rose to 29.17 per cent of total deposits, he said.

“Bank has now started reaping the benefits of ”KBL VIKAAS,” its transformation exercise and there is a significant improvement in all the fundamental parameters including the NIM (net interest margin) which rose to 3.08 per cent during the current quarter and CAR (Capital Adequacy Ratio) continuing at 13.08 per cent.

“Going forward Bank is confident of continuing the consistent and sustainable performance,” Mahabaleshwara said.

The stock of Karnataka Bank closed at Rs 42 apiece on BSE, up 0.24 per cent from its previous close.