Karnataka Bank Q4 profit dives 92% as NPA provisioning swells
Karnataka Bank’s March-quarter net profit declined 92% to Rs11 crore from due to multi-fold jump in provisioning for bad assets
New Delhi: Karnataka Bank on Tuesday reported a 92% slump in net profit at Rs11 crore for the March quarter due to multi-fold jump in provisioning for bad assets.
During the same quarter of 2017, the bank had made a net profit of Rs138.37 crore.
The bank’s provisioning for bad loans and contingencies was hiked over three-times to Rs541.75 crore during March quarter as against Rs160.40 crore in the year-ago period, Karnataka Bank said in a BSE filing.
Income during the quarter increased to Rs1,737.55 crore as against Rs1,606.19 crore earlier.
For the full fiscal 2017-18, the bank said its net profit fell to Rs325.61 crore as against Rs452.26 crore. Income during the year was up at Rs6,378.09 crore from Rs5,994.74 crore.
Provisioning amount for the full year more than doubled at Rs1,163.01 crore against Rs527.85 crore in the preceding year.
Asset-wise, gross non-performing assets (NPAs) rose to 4.92% of the gross advances by the end of March 2018 from 4.21% a year ago. In absolute value, gross NPAs were Rs2,376.07 crore as against Rs1,581.59 crore. Net NPAs also increased to 2.96% (Rs1,400.51 crore) compared with 2.64% (Rs974.73 crore).
Karnataka Bank board has recommended dividend of Rs3 per share for the year ended 31 March. The provision coverage ratio as at end-March 2018 stood at 54.56% (54% as on 31 March 2017).
On the divergence in asset classification and provisioning for NPAs for 2016-17, the lender showed a gap of Rs1,115.10 crore in terms of gross NPAs. For net NPAs, the divergence came in at Rs667.86 crore. Thus, the divergence in NPA provisioning for the fiscal stood at Rs472.50 crore.
The divergence with respect to bad loans, calculated on the basis of of figure reported by the bank and that assessed by the central bank, led to an adjusted net loss of Rs95 crore for 2016-17.
Otherwise, the bank had reported a net profit of Rs452.26 crore for that financial year. Stock of the bank closed 1.77% down at Rs110.75 a piece on BSE.