Karnataka Bank Q1 profit falls 27% on lower income, higher provisions

Private sector Karnataka Bank reported a 27% fall in net profit at Rs 292.4 crore in the first quarter of the fiscal as compared with Rs 400.33 crore in the year-ago period, owing to a fall in net interest income and higher provisions.

Provisions and contingencies were more than double at Rs 111 crore against Rs 40 crore in the corresponding quarter last year.

The bank's net interest income for the quarter stood at Rs 756 crore, down 16% from the year ago period's Rs 903 crore. The 28% rise in other income at Rs 358 crore against Rs 279 crore could not offset the fall in core income.


Consequently, operating profit stood lower at Rs 467 crore against Rs 559 crore.

The bank, now under interim managing director Raghavendra Srinivas Bhat after the abrupt exit of Srikrishnan Hari Hara Sarma, saw its gross advances portfolio contracting 1.6% year-on-year to Rs 74267 crore at the end of June.

The book quality improved with gross non-performing assets ratio falling to 3.46% from 3.54% a year back. Net NPAs stood at 1.44% against 1.66%.

Its deposits grew 3.2% over the same period to Rs 1.03 lakh crore.