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Sharp rise in provisions and weaker margins led to a 52 per cent drop in Dena Bank’s net profit in the second quarter ending September 2014. The net profit declined to ₹52 crore in Q2 FY15 as against ₹107 crore in the year-ago period. “The main reason for decline in profitability was higher provisions ... There was no demand for credit too,” said Ashwani Kumar, Chairman and Managing Director.
Provisions towards bad loans jumped 223 per cent to ₹352 crore as against ₹109 crore in the year-ago period. Net interest income (difference between interest earned and expended) was almost flat from last year at ₹625 crore. On the other hand, non-interest income grew 20 per cent to ₹179 crore from ₹150 crore.
As on September 30, net advances increased 14 per cent year-on-year to ₹73,855 crore, from ₹64,785 crore.
Deposits grew 14 per cent to ₹1.07-lakh crore from ₹93,669 crore as on end-September last year. Gross NPAs (non-performing assets) worsened to 5.12 per cent of total advances from 3 per cent in the year-ago period.
Net NPAs increased to 3.59 per cent (2.02 per cent). “We aim to reduce our NPAs by 50 basis points and take our gross NPAs to 4.5 per cent by the year-end…,” Kumar said.
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