Increase in provisioning led to a 8.43 per cent decline in net profit of Karnataka Bank Ltd in Q4 of 2011-12. The bank's board of directors, which met in Mangalore on Friday, has recommended a dividend of Rs 3.5 per share for 2011-12.
The bank recorded a net profit of Rs 83.16 crore in the fourth quarter of 2011-12, against Rs 90.82 crore in the corresponding period of the previous fiscal.
Speaking to Business Line after the board meeting here, Mr P. Jayarama Bhat, Managing Director of the bank, said that net profit has come down because of provisioning and tax expenses.
However, there was a 100 per cent jump in operating profit during the period, he said.
The provisioning during Q4 increased to Rs 75.72 crore (-5.28 crore), and tax expenses to Rs 23.47 crore (Rs 5.80 crore).
For 2011-12, the bank posted a net profit of Rs 246.07 crore (Rs 204.61 crore), registering a growth of 20.26 per cent.
Asked about the increase in net NPAs during the fourth quarter, he said the corporate and SME sectors contributed to this increase.
Fresh slippages are in the industrial sector, including exports, and partly in the agriculture sector.
Outlook
On restructured loans, he said: “We have restructured 92 accounts with around Rs 700 crore. Of this, some are in power sector and others are corporate-debt restructuring.”
On the outlook for 2012-13, he said the bank wants to increase its business growth by about 25 per cent.
During 2011-12, the deposits of the bank reached Rs 31,608 crore (Rs 27,336 crore), and advances Rs 20,721 crore (Rs 17,348 crore), registering growth of 15.63 per cent and 19.44 per cent, respectively.
Cost of deposits went up to 7.92 per cent (6.87 per cent) and yield on advances to 12.62 per cent (11.08 per cent) during the year.
On Friday, the scrip of Karnataka Bank Ltd closed at Rs 75.40 on BSE, up 1.82 per cent against the previous close of Rs 74.05.