Top 12 banks clock 55% jump in Q1 net: CARE

Bolstered by a four-fold jump in treasury gains, India's top 12 banks clocked a 55.2 per cent jump in net profits in the quarter ended June 30, but high cost of funds hit their net interest margins, rating agency CARE said in a report today.

Aggregate net profits of the top banks zoomed to Rs 8,175.6-crore in the quarter as compared to Rs 5,266.7-crore in the year-ago period, with treasury gains accounting for 11.6 per cent of the operating income, the report said.

However, higher cost of funds and lower lending rates brought down the NIMs (net interest margin) of the top 12 banks in the April-June quarter due to subdued growth in the net interest income (NII), it said.

 

Given that a substantial portion of deposits were mobilised in Q2 and Q3 of FY09, the interest outgo on these deposits remained high during the quarter, CARE said.

In the face of slowdown, banks' provisions for non-performing assets rose by 3.5 times in the quarter over the same period in the previous year, the report said.

However, the banks could report lower provisioning during the quarter due to change in secondary market conditions, it added.