Welspun India consolidated net profit declines 22.58% in the March 2017 quarter

Elizabeth Williams
April 26, 2017

The private sector bank's deposits jumped to ₹40,208 crore as at March-end 2017 from ₹8,219 crore as at March-end 2016.

While the bank reported a marginal decline in its domestic advances, driven by a more than 10% contraction in its corporate loan book, loan growth in segments like mortgages, and MSME (micro small and medium enterprise) stood at a strong 23% and 18% respectively.

For the whole of 2016-17, profit came in at Rs 1,020 crore, marking completion of its first full year of operations. The bank sold ₹2,000 crore of gross non-performing assets to asset reconstruction companies during the quarter which helped it bring down the gross NPA ratio to 2.99% from 7.03%, as on December end.

Most analysts had expected the bank to report a quarterly net profit jump of around 15-17 percent and NII of around 14 percent. Also, the bank's infrastructure concentration was down to 54 per cent.

IDFC Bank shares closed at ₹59.45 apiece, up 1.02 per cent over the previous close on the BSE.

Banking analysts were "positively surprised" by HDFC Bank's earnings.

The bank had started off in October 2015.

"Cost of funds benefit is helping HDFC Bank to remain extremely competitive in the industry and gain market share", added Mehta. The bad assets proportion of Indian Bank remains one of the lowest amongst PSBs and comparable to that of SBI.

The board of directors which met today recommended a dividend of Rs 6 per equity share of Rs 10 for the year ending March 31, 2017 as against Rs 1.50 per equity share of Rs 10 declared in the previous year (subject to approval of shareholders). Net NPAs stood at 0.33 percent of net advances on March 31, compared with 0.32 percent a year ago.

Gross bad loans as a percentage of total loans fell to 2.99 percent in the March quarter, from 7.03 percent in the December quarter.

Kumar said the bank targets to grow its deposit base by 11-12 per cent and advances by 12-1 per cent with focus on retail lending.

The RBI has - while introducing stringent asset quality reviews - urged banks to be strict in assessing risks they face, through qualitative and quantitative measures, and make provisions above the minimum requirements.

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