Karnataka Bank (KB), a Mangalore-based private sector lender announced its third quarter (October-December, 2012-13) results. Its net profit moderated to 11 per cent year-on-year to Rs 80 crore on the back of increased tax expenses.
The profit before tax gained 77 per cent y-o-y to Rs 117 crore. In an interview to CNBC-TV18, P Jayarama Bhat, MD of Karnataka Bank said that The gross NPA has gone up from Rs 729 crore to Rs 781 crore. However, two accounts are pending in CDR and if it is considered then the gross NPA level will come down.
Below is the edited transcript of his interview to CNBC-TV18
Q: Just to take us through the headline numbers could you explain the reason behind the asset quality pressure that we are seeing this time?
A: Asset quality as far as the percentage is concerned, year on year (YoY) it has come down. Gross NPA percentage has come down from 4 percent to 3.3 percent. Net NPA has come down from 2.23 percent to 2.19 percent.
In fact quantum wise also quarter to quarter on YoY basis Rs 801 crore was the last years figure. It has come down to Rs 781.24 crore. So, the gross NPA and net NPA YoY has come down.
Q: As per reports there were three to four large account as of Q2 and that was suppose to go in for corporate debt restructuring (CDR) so that was suppose to be upgraded. Did that not happen, what really is the reason behind these numbers?
A: Some accounts were not finalized in CDR. We have made some recoveries and that is why the gross NPA quantum wise it has come down and sequentially it has gone up. The gross NPA has gone up from Rs 729 crore to Rs 781 crore.
Some accounts there were temporary aberrations. Once again it has been reported as NPA, but it was referred to CDR. In our case about two accounts are pending in CDR to be considered. If it is considered then the gross NPA level will come down.
Q: On a sequential basis gross NPA has gone up then, but you have guided for gross NPA to be contained between 2.5-2.7 percent for FY13. Do you stick by it? What is your guidance then for FY13?
A: By March end, we have lot of recoveries and one time payments lined up. There are some assets to be sold as well, we are finalising on that too. So, the gross NPA is likely to come down to a level of 2.75 percent or 2.30 percent.
Q: What is your provisioning figure? Has it increased to around Rs 37 crore sequentially?
A: It is about Rs 22 crore under the NPA provisioning. For restructuring of account, it was increased the 2 to 2.75 percent, about Rs 9 crore provision has been made in that and some on other issues, so in total Rs 32 crore.
Q: There has been a buzz about a possible takeover regarding Karnataka Bank. Could you confirm or deny anything that you can tell us on that front?
A: This has been a continuous question for me since last 6 to 7 months. As far as this is concerned, there are no issues. All these rumors are false.