Karnataka Bank's net profit up 43%

Karnataka Bank Ltd recorded a net profit of Rs 41.08 crore during the second quarter of 2011-12, against Rs 28.72 crore in the corresponding period of the previous year, registering a growth of 43.07 per cent.

Speaking to Business Line here on Monday, Mr P. Jayarama Bhat, Managing Director and Chief Executive Officer of the bank, said that the growth in operating profit and credit helped the bank record the growth.

Stating that the operating profit during the second quarter stood at Rs 116.72 crore (Rs 75.58 crore), he said: “Around 54 per cent increase is there in operating profit. This is because of the robust credit growth of 21.58 per cent. And also yield on advances increased to 12.18 per cent (10.70 per cent), and cost of deposits to 7.75 per cent (6.95 per cent). With this, interest spread has increased from 3.75 per cent to 4.43 per cent.”

During the second quarter of the fiscal, the net interest income (NII) stood at Rs 181.64 crore (Rs 136.42 crore), recording a growth of 33.14 per cent. The NII during the first six months of the fiscal increased by 34.57 per cent on a year-on-year basis to Rs 335.33 crore from Rs 249.19 crore. The net interest margin (NIM) stood at 2.20 per cent (1.96 per cent), he said.

To a query on the increase in net NPA, he said: “There are some temporary aberrations in the sub-standard category, which we are trying to upgrade.”

The bank posted a net profit of Rs 90.86 crore (Rs 75.20) for the six months period ended September, showing a growth of 20.82 per cent.

On Monday, the stock of the bank closed at Rs 89.95 against the previous closing of Rs 87.65 on the BSE.