Corp Bank net up 1.7%

Corporation Bank on Friday reported a marginal 1.7 per cent growth in net profit for the fourth quarter ended March 2012 at Rs 351.3 crore due to higher provision for restructured assets and a dip in non-interest income.

The public-sector lender had posted net profit of Rs 345 crore for January-March 2011.

Ajai Kumar, chairman and managing director of the Mangalore-headquartered bank, said the operating environment was difficult, indicating effects of slowdown. Credit demand in the fourth quarter was subdued.

The net interest income was up 9.5 per cent to Rs 814.3 crore. The net interest margin was 2 per cent, down from 2.8 per cent a year ago. The non-interest income was down by 10.7 per cent to Rs 423 crore. Net profit rose 6.6 per cent to Rs 1,506 crore from Rs 1,4133 crore.

The bank’s deposits rose 16.61 per cent to Rs 1,36,142 crore. The share of low-cost deposits was 22 per cent at the end of March 2012. The bank has pegged a deposit growth of about 20 per cent in the current financial year.

Its advances rose 15.7 per cent to Rs 1,00,469 crore from Rs 86,850 crore at the end of March 2011. Kumar said the growth prospects were better this year and the bank was targeting growth of 20 per cent in advances during 2012-13.

Referring to status of stress assets and bad loans, he said while non-performing assets had grown through the year, the peak of NPA additions was over. Its gross NPAs stood at 1.26 per cent — up from 0.91 per cent as in March 2011.

The bank restructured loans worth Rs 3,000 crore in the fourth quarter. The loans to Air India (Rs 1,300 crore) and advances to Rajasthan state power distribution companies (Rs 1,233 crore) were restructured in Q4.

This increased the provisions for standard assets in the fourth quarter.

As compared to last year’s recovery of about Rs 627.33 crore, the bank has done Rs 758.6 crore of cash recovery and upgradation. The board has recommended a dividend of 205 per cent for year ended March 2012 per share of the face value of Rs 10 each. The shares of the bank declined Rs 14.80 (3.7 per cent) to Rs 385.30 at close of trading hours on the Bombay Stock Exchange on Friday.

The 1906-founded bank, initially based in Udupi, was nationalised in 1980.