Advances Drop At Gtb

The growth in profits, however, has been slower, with net profits rising 50 per cent to Rs 24.23 crore. GTB has been able to safeguard its profits due to the substantial increase in non-fund based income, which increased from Rs 21.93 to Rs 34.93 crore. The banks high resource cost implies that increasing non-fund based income would be crucial for its future profitability.

During the first half of the year, GTBs deposits increased by around Rs 547.91 crore. Of these incremental funds Rs 144.92 crore have been deployed in investments, which comprise mainly government securities. The banks expansion bidhas also seen almost Rs 38 crore pumped into fixed assets.

However, the bank has chosen to restrain its credit expansion and this has resulted in advances dropping, albeit marginally from Rs 1,377.32 crore to Rs 1,340.75 crore. This could possibly be a fallout of the reduction in export credit refinance announced during the slack season credit policy. GTB, which had lent heavily to the export sector last year has since reduced its exposure in exports to 47 per cent. While analysts are quick to point out that the entire banking sector this year has witnessed a negative credit growth, panic should not set in as credit growth has historically been higher during the busy season.