Corporation bank posted a net profit of Rs 291 crore, mainly aided by increase in treasury gains and net interest income. This is a rise of 53 percent over the corresponding quarter a year ago.
During the July-September quarter, the banks treasury income rose to Rs. 75 crore from Rs. 23 crore in the corresponding period a year ago. There was a rise of 24 percent to Rs.503 crore in the net income.
JM Garg, Chairman and Managing Director of Corporation Bank, said the bank had reduced its cost of deposit and improved its income on loans despite pressures on net interest margins (NIMs) in the industry. The bank net interest margin (NIM) reduced marginally to 2.30% from 2.43% in the corresponding period. The net profit for six months increased 177% to Rs 552 crore while operating profit in the same period increased 64% to Rs 1,106 crore.
Non-interest income increased 73 percent to Rs 303 crore in July-September quarter. Between April and September, incremental deposits increased by Rs. 6,991 crore. The deposits were up by 34 percent year-on-year and the advances increased by 21 percent.
The CMD said that the bank is expected to improve its NIM in the coming quarter but a lot would depend on whether the Benchmark Prime Lending Rate (BPLR) is replaced by base rate or not. The Deepak Mohanty report has suggested RBI to replace the BPLR by a base rate. The report says that banks should not grant any loan, with tenure greater than one year, below base rate.
Public banks have so far posted strong results. Recently Bank of Baroda declared a 60 percent increase in net profits. This jump in profit is mainly attributed to its income from lending, treasury and fee based services.