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Wednesday, January 23, 2013

Karnataka Bank Q3 net up 11% despite higher tax outgo, provisioning

Karnataka Bank Ltd recorded a 11.13 per cent growth in net profit at Rs 80 crore during the third quarter of 2012-13 against Rs 72 crore in the corresponding period of the previous fiscal.

P. Jayarama Bhat, Managing Director and Chief Executive Officer of the bank, told Business Line that this is in spite of an increase in the tax expense and additional provisioning for restructured standard accounts as per the RBI’s directive.

(In the second quarter review of monetary policy on October 30, the RBI had increased provisioning for restructured standard accounts to 2.75 per cent from 2 per cent.)

“We have increased the provisioning by 0.75 per cent for the entire portfolio as per the RBI guidelines. That came up to about Rs 9 crore,” he said.

Stating that wage revision negotiations have started, he said the bank has provided for that also.

The tax expenses of the bank, he said, stood at Rs 36.92 crore during the third quarter of 2012-13. The bank had got a tax rebate of Rs 6.37 crore in the third quarter of 2011-12.

The net profit for first nine months of the fiscal stood at Rs 280.69 crore against Rs 162.91crore in the corresponding period of the previous year.

On the outlook for the fourth quarter, Bhat said: “We will be on target. We have already taken a one-time hit for all provisioning. We hope to do better in the last quarter. We are aiming to bring the gross NPA to 2.5-2.75 per cent from 3.3 per cent.”

During the quarter, the net interest income of the bank stood at Rs 227.8 crore (Rs 184.67 crore), and ‘other income’ at Rs 86.24 crore (Rs 87.34 crore).

On Wednesday, the Karnataka Bank scrip closed at Rs 164.95 on the BSE, down 5.55 per cent against the previous closing of Rs 174.65.


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