Karnataka State Financial Corporation turns around

Karnataka State Financial Corporation (KSFC) has registered an operating profit of Rs 14.11 crore and a net profit of Rs 0.87 crore in 2003-04 as against the operating loss of Rs 72.67 crore during the previous fiscal.

According to the company, one of the major factors in this turnaround was the recovery of loans worth Rs 562.43 crore during the year.

During 2003-04, KSFC extended financial assistance to the tune of Rs 302.77 crore of which assistance to small scale industries accounted for Rs 147.03 crore which forms 48.56 per cent of the gross sanctions.

The cumulative sanctions crossed Rs 7,184 crore covering over 1.54 lakh cases. KSFC disbursed loans of Rs 248.79 crore during the year and the cumulative figures crossed Rs 5,775 crore.

KSFC managing director V Umesh said: "We had strict control on expenditure resulting in reduction of expenses by 20.30 per cent. Interest expenses came down by 22 per cent, and the net NPA was trimmed by two per cent. There was also a reduction of the weighted average cost of funds from 11.65 per cent to 10.25 per cent."

Umesh said that a tripartite MoU for short-term restructuring of KSFC with the state government and Sidbi has helped them turn around. He also noted that the consolidation of financial results is one of the foremost priorities for the coming years and KSFC intends to activate reconstruction activities to hive off doubtful assets.