Dena Bank Q2 profit grows 20.5% to Rs 194 cr

Dena Bank has reported a 20.51 per cent jump in net profit to Rs 194 crore for the second quarter ended September 30, 2011, from Rs 161 crore in the corresponding quarter last year.

“The bank has identified agriculture, MSME and retail as thrust areas for lending,” said Mr D.L. Rawal, Chairman and Managing Director of Dena Bank.

As on September 30, 2011, the bank's deposits grew 20 per cent to Rs 64,236 crore and advances were up 18 per cent to Rs 43,100 crore. The net interest margin fell to 3.22 per cent during this quarter from 3.52 per cent in the previous quarter.

On increasing savings bank rate, Mr Rawal said that the bank has enough liquidity, and there is no immediate plan to increase the SB rate. “It will depend on a combination of factors such as liquidity position and relationship with one's customers. But in one or two months, we will have to take a call,” he said.

The bank has recruited 564 officers in the area of credit, agriculture and forex and is in the process of recruiting about 600 clerks. The bank is planning to open 100 new branches during the current financial year.

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Corporation Bank net up 14% despite rise in NPAs

Corporation Bank's net profit increased 14 per cent to Rs 401 crore in the quarter ended September 30, 2011, from Rs 352 crore in the corresponding quarter last year.

The bank saw a huge rise in non-performing loans on account of moving to the system based recognition of NPA, said Mr Ajai Kumar, Chairman and Managing Director.

Gross NPAs increased to Rs 1,080 crore (Rs 740 crore) and provisions increased to Rs 205 crore (Rs 98 crore).

“NPAs are the biggest challenge for the bank. The number of small NPA accounts has gone up due to the system based recognition of NPAs. Even those cases that were borderline are now shown as NPAs,'' said Mr Kumar

The bank will focus on recovery from NPAs over the next six months and target a gross NPA ratio of less than 1 per cent, he added.

The high cost of deposits also impacted the bank's profitability. The bank plans to improve its share of low-cost current and savings account (CASA) from the current 21.8 per cent. There is no immediate plan to increase the savings bank rate as it will impact profitability, Mr Kumar said.

Going ahead the bank will focus on retail and SME segments. In the current financial year, the bank is targeting deposit growth of 25 per cent, advances growth of 20 per cent, NIM at 3 per cent and CASA at 30 per cent.

Shares of Corporation Bank closed at Rs 426.75, up 2.92 per cent, from Rs 414.65, on the BSE, on Monday

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ICICI Bank: Declining provisions continue to aid profit growth

A moderation in net interest income (NII) and fee income growth and high operating expenses led to an operating profit growth of 6 per cent year-on-year for ICICI Bank in the second quarter.

This growth was the highest in six quarters. This is the first comparable quarter as Bank of Rajasthan was merged with ICICI Bank in August 2010.

Even as ICICI Bank witnessed a single-digit operating profit growth, the net profit growth was 21.6 per cent, thanks to provisions, which declined (year-on-year) for the sixth quarter in a row. Provisions declined by 50 per cent year-on-year.

Advances grew by 20 per cent year-on-year, but net interest income growth was more in-line with the balance sheet growth of 13 per cent year-on-year. The reason being, the net interest margins were similar to what they were in September 2010 quarter. Net interest margins were at 2.6 per cent in the September 2011, June 2011 and September 2010 quarters.

So what led to the similar NIMs?

The yield on investments, staying flat, did not support the sequential improvement of September quarter's yield on advances by 40 basis points. This more or less offset the rise in cost of funds by 20 basis points, leading to margins being maintained at similar levels.

The CASA ratio continues to be at impressive 42 per cent, which is encouraging. ICICI Bank's last base rate hike in mid-August will aid yield in upcoming quarters. However, the cost pressures from savings rate de-regulation may partly offset the yields.

Operating expenses grew at 20 per cent driven mainly by employee costs, although the bank added only 32 branches in a year. Last year, the bank's branch network jumped by 18 per cent following the merger with Bank of Rajasthan's branches.

Asset quality, in line with other private banks, improved with gross NPA ratio falling from 5.03 per cent to 4.14 per cent year-on-year. After provisioning, the Net NPA ratio at 0.93 per cent shows that the bank's initiatives to contain asset quality pressures over the last few years have paid-off. While GNPA ratio witnessed moderation sequentially, the restructured asset portfolio spiked mainly due to MFI restructuring. The restructured asset proportion to total advances is at 1.06 per cent as against 0.9 per cent in June 2011.

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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.

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Indian Bank's profit rises 12% to Rs 469 cr

Indian Bank has reported a net profit of Rs 469 crore for the July-September quarter of the current year, compared with Rs 416 crore in the corresponding quarter of last year – a growth of 12.7 per cent.

Growth has come from all areas – interest earned on advances (Rs 630 crore higher), income from investments (Rs 136 crore) and other income (Rs 60 crore).

At a press conference here, Indian Bank's Chairman and Managing Director, Mr T.M. Bhasin, said that the bank's gross non-performing assets as a percentage of gross advances declined to 1.21 per cent from 1.29 per cent in the quarter ended September 2010. However, in value terms, NPAs rose from Rs 904 crore to Rs 1,047 crore.

While the bank recovered Rs 245 crore from delinquent accounts, there was a fresh build up of NPAs of Rs 370 crore.

Earnings per share for the quarter work out to Rs 10.64, against Rs 9.40 previously.

For the first six months of the current year, Indian Bank's net profit was Rs 875.62 crore, compared with Rs 783.92 crore.

On the NSE today, the Indian Bank share closed at Rs 217.30, which was Rs 12.45, or 6.08 per cent higher, than the previous close.

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