Corporation Bank net up 2%

Corporation Bank has reported a two per cent rise in its net profit at Rs 378 crore in the first quarter of FY14, compared with a year ago. Operating profit increased 48 per cent to Rs 995 crore as on a healthy growth of 22 per cent in total income to Rs 4,852 crore. The Mangalore-based lender, on this sturdy platform, saw its net interest income grow by close to 19.5 per cent to Rs 964 crore on a healthy 17 per cent growth in advances to Rs 115,353 crore. The credit deposit ratio stood at 70.76 per cent. The net NPA is at 1.2 per cent, an improvement from the earlier 1.6 per cent in the corresponding earlier quarter.

Vaibhav Agrawal, (vice-president-research, banking) at Angel Broking said: "Corporation Bank reported healthy operating performance (net interest income grew by 19 per cent year-on-year), however dragged by weak asset quality performance, bottom line grew marginally two per cent year-on-year. While net interest income grew at a healthy pace of 19 per cent year-on-year, non-interest income grew strongly by 77 per cent year-on-year, probably boosted by treasury gains. Overall, pre-provisioning profit for the bank grew by 49 per cent year-on-year. On the asset quality front, the bank witnessed significant asset quality deterioration during the quarter, as gross and net NPA levels increased sequentially by 35 per cent. Given the recent macroeconomic developments and overall weak environment, we believe asset quality pressures are unlikely to subside as quickly as was anticipated earlier. Hence, we recommend neutral a rating on the stock."