Karnataka Bank on Saturday reported a 7.7 per cent year on year (YoY) increase in net profit at Rs 114.05 crore in the quarter ending June 30, 2022 (Q1FY23), on improvement in interest margins.
Mangaluru-based private sector lender had posted a net profit of Rs 105.9 crore during the same period last year (Q1FY22). Sequentially, its net profit declined by 12.4 cent from Rs 130.2 crore in Q4FY22.
On Friday, the bank’s stock had closed marginally higher (0.49 per cent) at Rs 71.95 per share. Its capital adequacy ratio stood at 15.41 per cent in June 2022 as against 14.58 per cent in June 2021.
The bank Board has approved a proposal to seek shareholders’ nod for raising further equity capital through Qualified Institutional Placement (QIP) route for an amount not exceeding Rs 1,000 crore. The annual general meeting will be held on August 26, 2022, the bank informed BSE.
The lender’s net interest income (NII) rose by 19.62 per cent in Q1FY23 to Rs 687.56 crore from Rs 574.79 crore in Q1FY22. Sequentially, the NII was up by 4.73 per cent from Rs 656.50 crore in the quarter ended March 2022.
Its net interest margin (NIM) improved to 3.33 per cent in Q1FY23 from 2.98 per cent a year ago, and from 3.25 per cent in Q4FY22.
Mahabaleshwara M S, Managing Director and CEO, said the credit grew by 13.03 per cent YoY and CASA (low cost deposits) by 12.51 per cent YoY. Moreover, in spite of a temporary aberration of a corporate advance, which required 100 per cent provisioning, the slippage ratio is at 1.03 per cent and the net profit also grew by 7.69 per cent YoY.
The increasing trend in NIM indicates the consistent improvement in all the contributing factors and is on the expected lines, Mahabaleshwara added.
Other income fell sharply by 41.14 per cent YoY to Rs 132.79 crore from Rs 225.62 crore in Q1FY22 and was down 48.33 per cent over Rs 256.98 crore in Q4FY22.
The provisions and contingencies were up marginally at Rs 362.9 crore in Q1FY23 from Rs 357.82 crore in the year ago quarter. Sequentially, it grew multi-fold from Rs 95.91 crore in Q4FY22.
The bank’s gross non-performing assets (GNPAs) declined to 4.03 per cent in Q1FY23 from 4.84 per cent in Q1FY22. However, it went up from 3.9 per cent in Q4FY22.
Net NPAs dipped to 2.16 per cent at end of Q1FY23 from 3.02 per cent a year ago and sequentially down from 2.42 per cent at the end of Q4FY22. The provision coverage ratio (PCR) rose to 76.77 per cent for the quarter under review from 72.16 per cent in Q1FY22.
The bank’s loans grew 13.03 per cent YoY to Rs 58,359 crore at the end of June 2022 and sequentially they grew by 2.78 per cent over Rs 56,783 crore March 2022.
Its deposits grew by 5.72 per cent YoY to Rs 80,576 crore in June 2022. But sequentially, they were flat over Rs 80,386 crore in March 2022.