Karnataka Bank Q1 profit jumps 43% as asset quality improves

Private sector Karnataka Bank on Wednesday reported a 43% year-on-year surge in net profit for the first quarter at Rs.419 crore as against Rs 292 crore in the year-ago period, buoyed by business expansion and asset quality improvement.

The lender’s gross non-performing assets ratio improved 88 basis points to 2.58% at the end of June from 3.46% allowing it to reduce the provision requirement to Rs 29 crore for the quarter against Rs 111 crore in the year ago period. Net NPA improved by 57 bps to 0.87%.

Its operating profit stood 24% higher year-on-year at Rs 580 crore as compared with 467 crore earlier. Net interest income also rose 24% at Rs 938 crore.
The net interest margin, a key gause of profitability, stood 3.2% for the quarter, up 38 basis points from year ago’s 2.82%.
Gross advances grew 17% year-on-year to 86,610 crore while aggregate deposits rose 7% to Rs 1.10 lakh crore at the end of June.