Other than Canara Bank and Oriental Bank of Commerce, many of the Public Sector Banks have shown decline in their profits in the third quarter ended December 2009 due to subdued treasury income and higher provisioning requirement.
Bank of India has reported a decline in its net profit for the second straight quarter, as its net profit dipped 53.44 per cent to Rs 406 crore compared to Rs 872 crore reported in the same period of the previous year.
With Rs 650 crore of fresh non-performing assets (NPAs) being added to the Bank of India’s book, NPA provisioning increased 115 per cent to Rs 446 crore. Both net and gross NPAs jumped to 1.03 per cent and 2.67 per cent from 0.52 per cent and 1.63 per cent, respectively. Net interest income marginally declined to Rs 1,495 crore for the reporting period.
Canara Bank, on the other hand, reported a 50 per cent jump in net profit at Rs 1,053 crore in the quarter. Its total income rose by just 1.6 per cent to Rs 5,469 crore. The bank has cut down its non-tax provisions by 52.5 per cent to Rs 167.4 crore during the quarter compared to a year-ago period. A sharp decline in the cost of deposits, which stood at 6.25 per cent compared to 6.81 per cent in the corresponding quarter last year, also helped the lender.
Its net interest income rose by 18.8 per cent to Rs 1,478 crore compared to the year-ago period.
Central Bank of India saw a 13 per cent fall in net profit to Rs 308.44 crore for the third quarter against Rs 353.2 crore at the end of the previous comparable quarter. The bottom line was pulled down by a jump in provisions, which were Rs 178.35 crore compared to a write-back of Rs 97.15 crore in the corresponding quarter last year. Of this, provisions for gross NPAs grew to Rs 15.92 crore from Rs 10.91 crore in the year-ago quarter.
Net interest income, or the difference between interest earned and interest expended, grew 8 per cent to Rs 731.3 crore from Rs 671.9 crore at the end of the December 2008 quarter.
Dena Bank has also reported a fall in net profit by 4.2 per cent to Rs 134.5 crore on account of a decline in treasury income and net interest income.
The absence of a one-time gain of Rs 32 crore as interest on income tax refund recorded in the year-ago quarter also weighed on the bottom line. Dena Bank’s trading profit fell to Rs 5.6 crore from Rs 49 crore in the corresponding quarter last year.
The saving grace was fee-based income, which grew nearly 23 per cent to Rs 83.27 crore from Rs 56.56 crore in the December 2008 quarter.
Oriental Bank of Commerce (OBC) has posted a 14.76 per cent rise in net profit to Rs 289.43 crore in the third quarter compared with Rs 252 crore in the corresponding quarter a year ago. The growth was led by a rise in interest income and fee-based income.
Total income rose 7 per cent to Rs 2,909.27 crore from Rs 2,718.20 crore in the same period last year, as treasury profit in the quarter came down to Rs 51 crore from Rs 184.8 crore last year.
The bank is also planning a follow-on public offer (FPO) after capital infusion from the government. The bank has requested the government to infuse Rs 1,500 crore.
Capital adequacy ratio stood at 13.20 per cent as per Basel-II and 11.66 per cent as per Basel-I. Interest income showed a growth of 11 per cent to Rs 2,671.59 crore in the quarter compared with Rs 2,400 crore in the corresponding period last year. Net interest margin improved to 3 per cent in the quarter against 2.02 per cent in the same period last year.
The business of the bank increased to Rs 189,299 crore at the end of December 2009, registering a growth of 20.58 per cent. Total deposits increased by 21.39 per cent to Rs 110,745 crore, while Casa deposits rose to Rs 27,050 crore.
The bank’s branch network reached 1,461 at December-end and it is planning to have 1,500 branches by the end of March this year. So far, it has opened 61 branches in the current financial year.
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