Corporation Bank posts 21 percent rise in profit

Corporation Bank posts 21 percent rise in profit

Mangalore Today News Network

Mangalore, October 22: On Thursday, Mangalore-based Corporation Bank reported netting an increase of 21 percent profit at Rs. 351.73 crore for the September quarter. The net profits of the bank were at Rs. 291.60 crore during the July-September of the last fiscal year. Ramnath Pradeep, the chairman and managing director of the bank, told the media that the cause for the profit growth is the rise of the net interest income by 42.1 percent to Rs. 715.25 crore.

The bank’s net interest margin also rose by more than 0.3 per cent to 2.64 percent and was able to reduce the deposit costs to 5.40 percent from last year’s 6.44 percent. The deposits grew 19.82 percent in the same quarter along with a 32.74 percent rise in advances to Rs. 52,568 crore.

The bank will target a 20 – 22 percent rise in deposits and 35 percent rise in credit by the end of this FY. The bank is also seeking to raise its 25 percent retail advances by focusing more on housing and vehicle loan segments. The bank also plans to introduce 190 branches to its already impressive network of 1,177 branches by Jan 2011, informed Mr. Pradeep.

On September 30, the bank’s capital adequacy ration was 14.48 percent and Mr. Pradeep said that the bank does not plan to raise fresh capital since it might do some capital infusion the following year. The bank’s net non-performing assets rose by 0.10 percent owing to a Rs. 54 crore loan given to an engineering firm, which later turned bad. The bank is going slow on lending to MFI institutions and is also insisting on low rate of interests as well as an end-use certificate to certify that lending has been done as fresh loans from clients.

Although the overall non-interest income of the bank has gone up, treasury operation profits have come down from Rs. 74.72 crore to Rs. 4 crore owing the volatile bond market, said Asit Pal, the executive director of the bank.