Karnataka Bank posts highest ever quarterly profit in Q1

Private sector lender Karnataka Bank has reported highest ever quarterly profit at Rs 163.2 crore, a growth of 22 percent over Rs 133.85 crore recorded in same period last year. The growth was driven by the improvement in asset quality, higher net interest income and operating income.

Net interest income, the difference between interest earned and interest expended, grew by 10.4 percent year-on-year to Rs 468.6 crore for the quarter ended June.

"Highest ever quarterly profit, historically high CD ratio, reduction in slippages, moderating NPAs, improved NIM & NII etc., are clear indications of robustness of future growth prospects of the bank," Mahabaleshwara M S, Managing Director & CEO said.

The deposits of the bank increased 11.56 percent year-on-year to Rs 62,725 crore while advances growth was 24.28 percent at Rs 47,731 crore in Q1. On the asset quality front, gross non-performing assets (NPA) were lower at 4.72 percent (against 4.92 percent QoQ) and net NPA also declined at 2.92 percent (compared to 2.96 percent QoQ) in Q1FY18.

Provisions for bad loans in Q1 increased 11.55 percent to Rs 222 crore compared to Rs 199 crore reported in same period last year, but fell sharply by 59 percent quarter-on-quarter.

Provision coverage ratio improved to 57.21 percent for the quarter ended June, from 41.1 percent in March quarter.Operating profit during the quarter grew by 19.11 percent to Rs 368.88 crore while other income fell 3.95 percent to Rs 208.80 crore compared to year-ago.