Karur Vysya Bank's second quarter net profit drops 25%

CHENNAI: The Karur Vysya bank's net profit fell 25% to 63 million rupees in the quarter of July-September, compared to 84 million rupees in the same period last year, due to a greater provision for bad Loans despite the improvement seen in the quality of the assets.

In September quarter, the bank increased provisioning for bad Loans by 71% at Rs 365 crore as against Rs 231 crore in same quarter last year.

During the September quarter, gross non-performing assets (NPA) in absolute terms lowered to Rs 4,391 crore, compared to Rs 4,511 crore in the previous quarter. Gross NPAs as a percentage of total Loans improved to 8.89% from 9.17% during the previous quarter while the net NPA ratio also decreased from 4.94% to 4.50% on quarterly basis.

In July-September, the operating profit of the lender increased by 19% to Rs 431 million rupees compared to Rs 361 million rupees in the previous year. There is a marginal increase in the net interest income (NII) of the bank for Rs 17 crore compared to the last quarter.

The bank's net profit was dragged by the provisioning increased by 71% compared to last year.

Total advances increased by Rs 1,247 million to Rs 49,388 million in this September quarter, from Rs 48,141 million reported last year. During the same period, total deposits increased by Rs 3,951 million (7%) from Rs 58,262 million to Rs 62,213 million.

The private lender HOUSE Deposits amounted to Rs 18,522 million rupees with a 30% stake, the bank's net interest margin (NIM) stood at 3.46%. The bank's provisions coverage ratio was 61.82%.

The total capital adequacy ratio (CAR) according to Basel III guidelines stood at 15.99% on September 30, 2019, compared to the 10.9% regulatory requirement.

Karur Vysya Bank the shares closed at Rs 55.40 each, 1% more in the BSE.