The rise in operating profit and revenue from treasury have enabled Kerala-based Dhanlaxmi Bank to post a net profit of ₹19.84 crore in Q1 of FY20. The bank had reported a net loss of ₹44.99 crore in the corresponding period of the previous fiscal.
T Latha, Managing Director and CEO, said the bank is poised to increase the overall growth by 10 per cent with a focus on retail deposits, particularly current and savings deposits.
The bank has worked out strategies to bring the cost to income ratio to below 65 per cent by March 2020. One of the strategies is to augment income by sanctioning and disbursing more credit, particularly in micro credit, MSME, retail and gold loans, which are high in Kerala. The liquidity position is also very comfortable and there is no constraint for further lending, she said.
During the quarter under review, the operating profit increased to ₹29.11 crore (₹20.02 crore). Net interest margin stood at 3.15 per cent (2.74 per cent). CRAR was at 13.85 per cent in the quarter under review, against 13.07 per cent in the corresponding period of the previous year. CAR was also at 10.62 per cent against 9.83 per cent earlier.
NPAs and recovery
Advances grew by 10 per cent year-on-year and the bank is looking ahead to similar growth in the coming quarters as well.
On the recovery front, the bank witnessed decline in net NPA to 2.35 per cent in Q1, against 3.79 per cent. The asset quality was good with no increase in NPA levels. There has been a recovery of ₹10 crore during Q1, against a similar slippage.
The gross NPA level stood at 7.61 per cent and the bank is looking to bring it down to below 7 per cent in the coming quarter, she said, adding that there are substantial recoveries in sight, going forward.
The Provision Coverage Ratio is also healthy at 85.38 per cent. The recovery and monitoring departments have also been strengthened to reduce slippages and go for recovery, Latha added
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