Corporation Bank posts 5% net profit in first quarter

Corporation Bank posts 5% net profit in first quarter

Mangalore Today News Network

Mumbai, July 30, 2012: Corporation Bank’s net profit up marginally by five per cent in the first quarter as it set aside higher amount to cover bad loans said Ajai Kumar, Chairman and Managing Director, Corporation Bank announcing the Performance Highlights of the Bank for the Quarter Ended 30th June 2012 in press meet held in Mumbai today.

For the April to June quarter, the public sector bank’s net profit rose to about Rs 370 crore from Rs 351 crore in the corresponding period a year-ago. Net interest income, the difference between interest earned and interest expended, grew 14 per cent to about Rs 808 crore.

 

 

Provisions to cover bad loans increased by about 3.5 times to about Rs 239 crore (Rs 67 crore, year ago). The bank restructured loan accounts worth about Rs 1,076 crore in the first quarter. Of these, electricity distribution companies alone accounted for Rs 950 crore.

Electricity distribution companies and state electricity boards continue to reel under pressure on account of higher input costs and shortage of raw materials like coal. About 13 per cent of the Mangalore-based bank’s restructured accounts slipped into non performing assets in the first quarter.

CASA ROADMAP – Add more branches
The bank plans to improve its current account and savings account deposit base in the coming quarters. The bank has a CASA deposit base of only about 21 per cent (of total deposits).

“We are trying to improve CASA by adding more branches. This financial year we plan to add about 300 branches, spread across urban, metro and rural centres, ” Ajai Kumar, Chairman and Managing Director, of the Bank said.

Shares of Corporation Bank, closed at Rs 402.80, up 2.93 per cent on the Bombay Stock Exchange.

Ashwani Kumar, Executive Director of the Bank was also present.