Corporation Bank profit rises 28% Quarter Ending 30 June

The Mangalore-based Corporation bank has registered a 36.78 per cent year-on-year increase in loans, while deposit growth was 26.21 per cent. During the quarter, the bank disbursed loans worth Rs 17, 427 crore, while deposit accretion was Rs 18,908 crore. As a result, incremental credit deposit ratio was close to 100 per cent. 

The net profit for the quarter ended June 2010 increased from Rs.261.25 crore as on June 2009 to Rs 333.78 crore recording a growth of 27.76%, while total business stood at Rs 1,55,840 crore compared to Rs.1,19,505 crore as on June 2009 up by 30.40%.

The total deposits of the bank increased to Rs 91,034.70 crore from Rs.72,127.16 crore recording a growth of 26.21%, while advances increased by 36.78% from Rs.47,378 crore to Rs 64,805  crore. The gross non-performing assets stood at 1.11% as compared to 1.29 %.

Chairman and Managing Director J M Garg said though the bank might hike deposit rates across various maturities shortly, that might not impact margins. “After the implementation of the base rate, all the loans which were priced around 4.5-5 per cent are now re-priced at 7.75-8 per cent. That will give us an interest income of Rs 300 crore,” Garg said.

The bank recently increased its retail deposit rates for the 1,000-day scheme from 7.25 per cent to 7.5 per cent. The bank raised its corporate bulk deposit rates and offered 7.25-7.5 per cent for three-year maturity to mop up Rs 3,000-4,000 crore in the first quarter. 

The bank aims to have a net interest margin of 2.5-2.75 per cent for the current financial year.

Garg also informed the government was likely to increase its stake in the bank to 60 per cent from 57 per cent at present. “The capital requirement for the bank to support growth for the current financial year is Rs 1500 crore.” The bank aims to have 25-30 per cent growth in business in the current financial year.