Gtb Q1 Net Spirals Lower By 56%

Global Trust Bank's (GTB) overexposure to the capital market reflected in this fiscal's first-quarter performance, affecting almost all the parameters.

The bank's net profit for the quarter ended June 30, 2001, has declined by 56.14 per cent.

Deposits dipped by 12.5 per cent and advances by 16 per cent.Total income had a nominal 0.62 per cent growth.

The bank's net non-performing assets (NPA) shot up to 7.5 per cent from 3.75 per cent at the end of the fiscal ended March 2001.

GTB has posted a net profit of Rs 16.30 crore on a total income of Rs 260.98 crore for the first quarter of the current fiscal compared with a net profit of Rs 37.16 crore and total income of Rs 259.37 crore registered in the corresponding quarter of previous fiscal.

Interest cost of the bank went up by 15.97 per cent to Rs 176.81 crore, thus leading to a 27.75 per cent fall in operating profit.

The decision of the board of the bank to make an adhoc provision of Rs 15 crore, in addition to the statutory necessary provision of Rs 12.67 crore, resulted in a further fall of net profit.

Considering its overexposure to the capital market, the bank had made an adhoc provision of Rs 35 crore at the end of the fiscal 2000-01.

The bank chose to extend the same approach and continued to make provisons to meet the contingencies. Its net profit in the fiscal had declined by 26 per cent.

Commenting on the first-quarter performance, R S Hugar, chairman and managing director of the bank, said, "The results are in line with our expectations. We remain dedicated to making decisions that are in the best long-term interest of our customers, employees and shareholders."

According to the bank's statement the results reflected a conservative business approach.

"The bank recognises that current earnings could be shaded by prior period commitments. While every efforts will be made to minimise adverse impact on profit, correct reporting and transparency will overweigh all other considerations," the statement said.