Higher provisioning and bad loans led to a 21 per cent decline in Dena Bank's net profit in the April-June quarter. Net profit declined to Rs 189 crore from Rs 239 crore in the same quarter last year.

Provisioning jumped 121 per cent to Rs 228 crore from Rs 103 crore in Q1 FY13.

Net interest income (difference between interest earned and expended) declined marginally to Rs 605 crore (Rs 612 crore in Q1 FY13).

‘Other income’ increased sharply by 158 per cent to Rs 366 crore (Rs 142 crore) on the back of substantial treasury gains.

Despite having higher statutory liquidity ratio of 28 per cent (that is, the bank has parked 28 per cent of its deposits in government securities against the minimum requirement of 23 per cent), Ashwani Kumar, Chairman and Managing Director, said the bank won’t offload the excess bonds held as “in a situation where the yields on the bonds are rising, the bank would not benefit.”

As on June 30, 2013, total advances grew 9 per cent year-on-year to Rs 64,975 crore, while deposits increased 18 per cent to 94,359 crore. Advances growth came on the back of agriculture and micro and medium sector segment.

During the quarter net interest margin dropped to 2.55 per cent from 3.06 per cent in the corresponding quarter a year ago.

Gross non-performing assets (NPAs) rose to 2.70 per cent (from 1.80 per cent). Net NPAs also increased to 1.74 per cent (from 1.01 per cent in Q1 FY13).

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