LVB posts net profit of Rs 31.50 crore

The operating profit has increased while NPA has decreased, says company MD

Lakshmi Vilas Bank has posted a four-fold increase in net profit at Rs 31.5 crore for the quarter ended September 30, 2014, compared with Rs 5.85 crore in the year-ago period.

The bank’s total income grew 15 per cent to Rs 618 crore for the quarter, against Rs 537 crore in the same period of the previous financial year.

“The second quarter of the last financial year is an aberration as the provisioning was higher during that quarter. It would not be advisable to compare this quarter with the same quarter of last year,” said Rakesh Sharma, managing director and CEO of Lakshmi Vilas Bank.

He said the net profit for the first half of the current financial year grew 91 per cent to Rs 59.65 crore, compared to Rs 31.19 crore posted during the first six months of FY14.

The bank’s non-performing assets (NPA) have also come down this year, Sharma said. The gross NPA has dropped to Rs 510.97 crore during the quarter ended September 30, 2014 from Rs 644.12 crore in the same period in 2013.

In percentage terms, NPA has dropped from 5.22 per cent in the second quarter of FY14 to 3.72 per cent this year. This has helped the bank bring down the provisioning for NPA from Rs 93 crore in the first half of FY14 to Rs 36 crore in the same period in FY14.

The bank is also looking to bring down the NPA levels gradually to below three per cent by the end of FY15. The firm’s NPA exposure is mainly to textile, infrastructure, and gold jewellery.

Retail and small and medium-sized enterprises loans contribute to almost 71 per cent of the bank's total advances, while 29 per cent is of large corporates. The bank has raised Rs 406 crore in the last quarter and the capital adequacy ratio has increased to 13.20, Sharma noted.

The bank plans to add 75 branches during the rest of the year, he added.