Dhanlaxmi Bank slides 5% as Q1 provisions jump 3-fold YoY to Rs 37 crore

Shares of Dhanlaxmi Bank slumped 5 per cent to Rs 12.3 apiece on the BSE on Tuesday after the bank's June quarter net profit tanked 69 per cent on a yearly basis to Rs 6.09 crore. It had logged a profit of Rs 19.84 crore in the corresponding quarter of the previous fiscal. 

Interest income was down to Rs 236.65 crore in the quarter under review from Rs 240.43 crore reported in the year-ago period. Besides, its total income increased to Rs 278.62 crore from Rs 256.75 crore in the year-ago period, the lender said.

The lender's provisioning for bad loans and contingenices spiked to Rs 37.02 crore in Q1FY21 as against Rs 9.27 crore a year ago. However, it was lower from previous quarter's Rs 56.89 crore.

"The spread of Covid-19 across the globe has resulted in a decline in the economic activity and increase in volatility in financil markets. The extent to which the Covid-19 pandemic will impact the bank's future results will depend on related deveopments, which remain highly uncertain. Despite these conditions, there is not likely to be any significant impact on the bank's liquidity," the management said in a statement. 

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).

At 2:45 pm, the stock was down 4.7 per cent at Rs 12.35 on the BSE, as against 746 points, or 2 per cent, rise in the S&P BSE Sensex.