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Wednesday, January 30, 2013

Dena Bank profit rises 11% on growth in advances

Dena Bank reported 11 per cent increase in net profit at Rs 206 crore during the October-December quarter of the current fiscal on the back of robust growth in advances.

The public sector lender had reported a net profit of Rs 187 crore in the year-ago period.

Profit growth in the reporting period was tempered due to increase in non-performing assets (NPAs) and higher provisioning.

Net interest income (difference between interest earned and expended) increased 14 per cent to Rs 615 crore in Q3FY13. Non-interest income grew by 8 per cent to Rs 144 crore.

Net advances grew 32 per cent year-on-year to Rs 63,041 crore due to higher loan growth in the agriculture and micro and small enterprise segments. Total deposits increased 24 per cent to Rs 84,882 crore.

Provisions during the quarter were up 26 per cent to Rs 157 crore (Rs 124 crore). Fresh slippages during the quarter were Rs 237 crore, these include majorly from the cotton, power and real estate sector.

Net interest margins declined to 2.88 per cent from 3.33 per cent in the year-ago quarter due to higher cost to income ratio and rationalisation of interest rates especially in the SME sector, said Ashwani Kumar, Chairman and Managing Director, Dena Bank.

NIMs will remain under pressure due to RBI’s rate cut. Further, immediate reduction in the deposit rates looks difficult, Kumar added. The bank’s asset liability committee will decide on the rate cuts in the next 10 days.

Capital adequacy ratio declined to 11.47 per cent from 11.58. The bank has asked the government for a capital infusion of Rs 1,600 crore which is likely to be approved.

Shares of Dena bank ended at Rs 110.45 per share, lower by 1.78 per cent on the Bombay Stock Exchange on Wednesday.


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