Dhanlaxmi Bank Q1 profit tumbles 69% on higher bad loan provisioning

Private sector Dhanlaxmi Bank on Monday posted a 69 per cent decline in its net profit at Rs 6.09 crore for the first quarter ended June 2020 due to higher provisioning.

The bank had registered a net profit of Rs 19.84 crore during the same quarter of the previous fiscal.

On a sequential basis, however, its net profit in the quarter under review increased from Rs 2.6 crore in the March 2020 quarter.

Total income during April-June 2020 increased to Rs 278.62 crore from Rs 256.75 crore in the year-ago period, the lender said in a regulatory filing.

Interest income was down at Rs 236.65 crore in the June quarter from Rs 240.43 crore a year ago. There was a decline in income from investments, income from interest on balances with RBI and other interbank funds.

Bank's provisioning for bad loans and contingenices spiked to Rs 37.02 crore during the reported quarter of FY21 as against Rs 9.27 crore a year ago. However, it was lower from previous quarter's Rs 56.89 crore.

On asset front, bank's gross non-performing assets (NPAs) fell to 6.89 per cent of the gross advances as on June 30, 2020, from 7.61 per cent a year ago.

In absolute terms, gross NPAs were at Rs 464.45 crore as against Rs 496.48 crore.

Net NPAs reduced to 2.18 per cent (Rs 140 crore) from 2.35 per cent (Rs 145.20 crore).

Dhanlaxmi Bank said despite the COVID-19 related challenges in the economy, there is not likely to be any significant impact on the liquidity position of the bank.

Stock of the bank closed at Rs 12.96 apiece on the BSE, up 2.29 per cent from the previous close.