Karnataka Bank Q2 profit up 15.6% on lower provisioning

Lower provisioning helped Karnataka Bank register a 15.6 per cent growth in net profit during the second quarter of 2015-16.

The bank’s net profit stood at ₹102.25 crore during the quarter against ₹88.46 crore in the corresponding quarter of the previous fiscal.

Speaking to

BusinessLine after the board meeting in Mangaluru on Friday, P Jayarama Bhat, Managing Director and Chief Executive Officer of the bank, said that there was lesser provisioning for non-performing assets (NPAs) during the second quarter.

Provisions (other than tax) and contingencies came down to ₹35.07 crore (₹83.64 crore) during the period.

He said gross NPAs fell to 3.18 per cent (3.53 per cent), and net NPA to 1.96 per cent (2.37 per cent). The quantum of gross NPAs came down from ₹1,060 crore in Q2 2014-15 to ₹1,043 crore in Q2 2015-16. The net addition to the NPA was ₹10 crore sequentially. In the June quarter, the gross NPA was ₹1,033 crore.

“As the slippages were less in this quarter, provisioning has come down,” Bhat said.

On the outlook for the coming quarters, he said: “Reduction of gross and net NPAs is an indication that our monitoring has worked. We are intensifying our credit monitoring and recovery, and trying to see that net NPAs comes down further.”

He said the bank will try to reach around 2.5 per cent of gross NPAs and 1.5 per cent of net NPA by the end of the current financial year.

During the quarter, net interest income stood at ₹306.89 crore (₹297.27 crore), and other income at ₹121.01 crore (₹102.77 crore).

On Friday, Karnataka Bank shares closed at ₹128.80 on the BSE, up 4.04 per cent from the previous close of ₹123.80.