Karnataka Bank net up 11% on NII

Buoyed by better net interest income (NII) and net interest margin (NIM), Mangalore-based Karnataka Bank has reported net profit of Rs 80 crore for the third quarter ended December 31, 2012, up 11.11 per cent from Rs 72 crore in the corresponding quarter of FY12.

The private sector lender’s total income for the quarter went up by 19 per cent to Rs 1,051 crore, compared to Rs 883 crore in FY12. The operating profit rose 48 per cent to Rs 154 crore from the year-ago period.

There has been a 23.40 per cent rise in NII, which stood at Rs 228 crore during the quarter. The bank’s NIM, too, improved 26 basis points (bps) to 2.36 per cent during the quarter.

P Jayarama Bhat, managing director and CEO, said the sustained growth in business enabled the bank to attain the present level of performance. “The bank has registered higher growth in both deposits and advances at 16.2 per cent and 18.9 per cent, respectively, against industry-level growth of 11.1 per cent and 15.1 per cent.”

The return on assets marginally declined to 0.81 per cent against 0.85 per cent in the year-ago period.

Its percentage of net non-performing assets declined to 2.19 per cent from 2.23 per cent. The capital adequacy ratio under Basel-II increased to 12.93 per cent from 12.46 per cent.

The stock closed at Rs 164.95 on the Bombay Stock Exchange today, a drop of 5.5 per cent over the previous close. In the recent past, the bank has been in the eye of takeover talks by some large banks such as ICICI Bank. As a result of this, its stock had moved up 30 per cent in the last quarter to Rs 164.95, as against Rs 126.6 per share on October 23, 2012.