The net profit for Lakshmi Vilas Bank dropped by 9 per cent to Rs 24.96 crore, while its business grew 32 per cent during the last quarter of 2011-12.
Calling it a year of mixed performance, Mr P R Somasundaram, Chief Executive of LVB, said, “It has also been a year of consistent growth amidst challenges. While there is huge satisfaction, there is some disappointment as well. I am happy because few fundamentals have been addressed, but there is a setback on account of some temporary NPAs.”
“We raised Rs 250 crore tier II capital during the fourth quarter. This pulled down our profits as costs were high. However, we have invested this (capital raised) very well,” he explained.
The overall performance in 2011-12 showed a 6 per cent growth in net profit after absorbing higher interest costs and operating investments for future growth.
“Our net profit has, for the second year in a row, crossed the Rs 100-crore mark to reach Rs 107.02 crore (Rs 101.14 crore),' said the LVB Chief.
The bank's total income grew 40 per cent to Rs 1677.18 crore (Rs 1201.85 crore).
While total deposits grew 27 per cent, the growth of retail deposits was higher at 44 per cent. Gross credit expanded, but was lower than the deposits growth.
“We maintained liquidity, and were consciously not focusing on advances,” said Mr Somasundaram.
Driven by higher costs and substantial growth in term deposits, LVB's net interest margin dropped from 3.75 per cent to 2.91 per cent in the 2011-12 fiscal.
The bank's net NPA rose to 2.98 per cent (1.93 per cent).
The Board has recommended a 35 per cent dividend for the 2011-12 fiscal against 25 per cent declared during the earlier year.
LVB added 17 more branches to take the total branch network to 291. The total number of ATMs rose to 547 at the close from 227 at the start of the 2011-12 fiscal.