Corporation Bank has reported marginal 2% increase in Net Profit at Rs 351.26 crore over 9% growth in NII at Rs 833.93 crore in the quarter ended March 12. Dip in the other income by 11% has retarded growth in the net revenues to meager 2% to Rs 1257.23 crore. Further, 34% jump in provisions and contingencies at Rs 337.72 crore has muted growth in PBT. Finally 570 bps dip in effective tax rate at 35.2% has aided 2% growth in the Net Profit.
Interest earned grew with slow pace of 9% at Rs 833.93 crore in the quarter ended March 12, as the growth in interest expended outgrew interest earned. Interest earned increased 40% to Rs 3585.88 crore on the back of 43% jump in Interest on advances at Rs 2691.27 crore. On the other hand, interest expended shot up 53% to Rs 2751.95 crore owing to 61% jump in the interest on deposits at Rs 2505.12 crore. The core fee income declined 12.5% to Rs 236.24 crore and lower recoveries dragged noninterest income down by 11% to Rs 423.30 crore. Apart from the core fee income, profit on exchange transactions grew 20% to Rs 42.96 crore; profit on sale of investments grew 17% to Rs 95.60 crore while that of recovery of bad debts and write back declined sharply 50% to Rs 37.79 crore. Resultantly, net total income grew marginally 2% to Rs 1257.23 crore.
The employee cost has declined 28% to Rs 216.07 crore and led operating expenses down 12% to Rs 442.98 crore in the quarter under review. The cost to income ratio has declined sharply 570 bps to 35.2% and led Operating Profit up 12% to Rs 814.26 crore. Provisions and contingencies jumped up 34% to Rs 337.72 crore mainly on the back of 56% jump in the provisions for standard assets at Rs 72 crore. On the other hand, provisions for bad debt marginally inched up 4% to Rs 178.32 crore while there was write back on investment depreciation at Rs 54.95 crore (against charge of Rs 54.53 crore in the previous year). Resultantly, PBT remained flat at Rs 476.54 crore. However, after considering 130 bps dip in effective tax rate at 26.3%, Net Profit was marginally higher by 2% to Rs 351.26 crore.
For the year ended March 12, the bank has reported 7% increase in the Net Profit at Rs 1506.04 crore over 7%increae in NII at Rs 3146.90 crore. Small 9.5% increase in the core fee income at Rs 831.71 crore coupled with 33% jump in the noncore fee income at Rs 660.91 crore has together paved 19% growth in non interest income at Rs 1492.62 crore. While 70 bps dip in cost to income ratio at 38.4% has lifted Operating profit up 12% to Rs 2855.97 crore, sharp jump in provisions and contingencies at Rs 950.46 crore has muted growth in PBT down by 1% to Rs 1905.51 crore. Finally, 590 bps dip in effective tax rate at 21% has pulled Net profit up 7% on y-o-y basis.
On consolidated basis, the bank has reported 7% increase in the net profit at R s1518.39 crore over 7% increase in NII at Rs 3147.21 crore.
The Bank has recommended dividend of Rs 20.50 per share of face value Rs 10 each for FY12.
Corporation Bank: Financial Results