Karnataka Bank recorded a net profit of ₹133.85 crore in the first quarter of 2017-18 against ₹121.54 crore in the corresponding period of 2016-17, a growth of 10.12 per cent.
Speaking to BusinessLine after the meeting of the board of directors to approve the financial results for the quarter here, Mahabaleshwara MS, Managing Director and Chief Executive Officer, said the increase in advances and decrease in high-cost deposits have helped the bank record the growth. The total advances of the bank increased to ₹38,483 crore in the first quarter from ₹34,946 crore.
He said the high-cost deposits have been reduced by around ₹304 crore. Around ₹6,000 crore of such deposits got re-priced and renewed at a lower price. As a result of this, cost of deposits also came down to 6.33 per cent (6.95 per cent).
The net interest income of the bank stood at ₹424.42 crore (₹364.69 crore in Q1 of FY17), recording a growth of 16.38 per cent. The other income increased to ₹217.39 crore (₹174.36 crore) during the period.
He said that the net interest margin (NIM) of the bank increased to 2.64 per cent (2.55 per cent) in Q1.
Non-performing assets The gross and net non-performing assets (NPAs) of the bank stood at 4.34 per cent (3.92 per cent) and 3.20 per cent (2.61 per cent), respectively.
To a query on this increase, Mahabaleshwara said the bank has one account of a steel manufacturing unit. It was on the borderline for the last four years. Unfortunately this time, it slipped to NPA.
Stating that the bank is confident of upgrading it, he said if that gets updated the NPA level of the bank will be very much in the comfort zone.
On slippages, recoveries and upgradation, he said the slippage during the current quarter was ₹490 crore, and there were recovery and upgradation of around ₹386 crore. The net slippage was ₹111.28 crore, whereas it was around ₹209 crore in the corresponding quarter of the previous fiscal.
He said the bank will focus on increasing the advances, NPA management and CASA (current account savings account) deposits.