Dhanlaxmi Bank on Thursday said its net profit for the quarter ended September 30 surged 168 per cent to Rs 4.35 crore from Rs 1.62 crore in the corresponding period last year.
The earnings announcement is made a week after the All India Bank Officers’ Confederation (Aiboc) accused the bank of ‘window dressing’ its accounts to show inflated profits. The bank had dismissed the allegations made by the employees’ union.
The private lender said its second quarter’s financial performance was driven by growth in fee income and overall business expansion. Non-interest income was up 21 per cent at Rs 44.4 crore.
Net interest margin improved 20 basis points to 2.2 per cent during the three-month period. Total deposits expanded 45 per cent to Rs 13,815 crore while net advances grew 44 per cent to Rs 10,130 crore.
“We continue to register robust growth in business vis-à-vis industry. The overall performance reflects our increased focus on generating productivity and profitability across all business verticals. Going forward, we aim to consistently drive profitability and increase shareholder value,” Bipin Kabra, chief financial officer, said in his post-earnings comments.
The bank’s gross non-performing asset ratio improved 71 basis points to 0.55 per cent aided by strong recovery in bad loans. The absolute amount of net non-performing assets also narrowed to Rs 17.5 crore as of September-end from Rs 50.4 crore a year ago. Provision coverage ratio of the bank was at 70.43 per cent.
Dhanlaxmi Bank closed last quarter with a capital adequacy ratio of 10.7 per cent higher than the minimum regulatory requirement of 9 per cent. Tier I capital adequacy ratio was at 8.73 per cent as of September-end.
The employees' union had accused the bank of maintaining a poor capital adequacy ratio, manipulating provisioning needs and ignoring social banking and financial inclusion agenda.
The bank has refuted these claims saying it "represent a motivated attempt by one of the employee associations de-recognised by the bank."
Dhanlaxmi Bank's shares had plunged 24 per cent on the local bourses after the allegations were made and touched a 52-week low of Rs 54.3 on October 11 on the National Stock Exchange. The shares have recovered 18 per cent since then. On Thursday Dhanlaxmi Bank shares ended at Rs 64.4, up 0.8 per cent from previous close.
