Higher provisions sink Corporation Bank's net profit 25%

Mangalore-based public sector lender Corporation Bank on Friday reported a 25 per cent drop in net profit at Rs 303 crore for the third quarter ended December 31, 2012, compared with Rs 402 crore reported in the corresponding quarter last year.

Higher provisions pulled down the bank’s net profit. The Bank's provisions increased by 49 per cent at Rs 406 crore as against Rs 273 crore in the year ago period. Total income grew 12.8 per cent to Rs 4,257.85 crore as against Rs 3,776.31 crore for the corresponding quarter last financial year.

Operating profit dipped five per cent to Rs 759 crore as against Rs 798 crore in the year-ago period.

Net interest income was marginally up at Rs 883.39 crore as against Rs 862 crore, showing a growth of just 2.5 per cent over the year-ago period.

Fee income from core areas like commission, exchange, and brokerage, among others increased 13.5 per cent over the corresponding quarter of last year to reach Rs 238.69 crore.

Return on assets declined to 0.74 per cent from 1.12 per cent. Percentage of net non-performing assets jumped to 1.63 per cent from 0.96 per cent. Capital adequacy ratio under Basel-II dipped marginally to 12.57 per cent from 12.84 per cent in the year-ago period.

The stock closed 6.21 per cent lower at Rs 427.85 on the Bombay Stock Exchange.