Karnataka Bank registered a 5.17 per cent rise in its second quarter net profit at ₹125.61 crore as against a net profit of ₹119.44 crore in the corresponding period of 2020-21.

Net interest income increased 10.83 per cent to ₹637.10 crore in Q2 as against ₹574.87 crore in the same period last fiscal. Fee-based income stood at ₹164.37 crore (₹121.46 crore).

Speaking to BusinessLine , Mahabaleshwara MS, Managing Director and Chief Executive Officer of the bank, said these factors indicate that there is significant improvement in the core business.

He stated non-performing assets (NPAs) of the bank have also further moderated during the quarter. Mahabaleshwara also noted that year-on-year comparison of NPAs is not fair during the current quarter because there was a standstill clause for the identification of the NPAs in the corresponding period a year ago. He said gross NPAs reduced to 4.5 per cent during Q2FY22 against 4.82 per cent in Q1FY22, and net NPAs also reduced to 2.84 per cent against 3 per cent in Q1FY22.

Credit growth

Stating the bank has been able to sail through one more pandemic-affected quarter with flying colours, he indicated that credit growth is back on track. Karnataka Bank added net fresh credit of ₹2,676.73 crore during Q2, he said.

On the 12.89 per cent decline in the operating profit, he said this is because of meagre trading profits during the period. The bank recorded an operating profit of ₹389.59 crore during the second quarter of 2021-22 as against ₹447.26 crore in the corresponding period of 2020-21. The trading profit of the bank stood at ₹6.5 crore (₹155.18 crore) during the period.

The bank has been able to continuously maintain the PCR at above 70 per cent and CRAR at 14.48 per cent. He said the net interest margin of the bank improved by 23 bps and now stands at 3.31 per cent (3.08 per cent).