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Mr J.M. Garg

Our Bureau

Mumbai, April 24 Corporation Bank posted a net profit of Rs 260 crore for the quarter ended March 31, 2009, up 26 per cent from Rs 206 crore in the same quarter last year, mainly on account of a huge rise in non-interest income.

The bank declared a dividend of Rs 8 per share, having face value of Rs 10.

The non-interest income surged by 105 per cent to Rs 493 crore on account of profits from sale of investments, which touched Rs 290 crore (Rs 43 crore), said Mr J.M. Garg, Chairman and Managing Director.

For the full year 2008-09, the bank posted a net profit of Rs 893 crore, up 21 per cent from Rs 735 crore in the previous fiscal. Non-interest income increased 58 per cent to Rs 1,107 crore (Rs 700 crore).

As on March 31, 2009, term deposits saw a growth of 40 per cent, while CASA deposits grew by 14 per cent. The CASA growth was less because lot of funds were transferred from savings and current accounts to term deposits, in order to take advantage of the interest rates, Mr Garg said.

Cost of deposits increased to 7.02 per cent (6.45 per cent) due to the high interest rates in the first half of the fiscal. “Lot of our bulk deposits will come up for renewal this year and get re-priced lower. So, it will give us relief,” Mr Garg said.

Net interest margin was at 2.43 per cent and the bank is looking to maintain NIM at 2.5 per cent in the current year.

In the current fiscal, the bank is targeting a credit growth of 20-21 per cent and deposit growth of 22 per cent.

The bank received a total of 5,404 crore applications for restructuring of loan accounts, amounting to Rs 2,323.78 crore. Of this, 4,313 accounts have been restructured, amounting to Rs 1,043.46 crore. The bank has made a provision of Rs 18 crore towards the restructured accounts.

In the case of restructured assets, the bank has put in a clause that, going ahead, if the cash flow of corporates permits them to pre-pay their loans, they should do so, Mr Garg said.

On Friday, shares of Corporation Bank closed at Rs 226.7 on the BSE, up from the previous close of Rs 220.30.

More Stories on : Financial Performance | Public Sector Banks | Financial Performance

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