Dhanlaxmi Bank Q2 net loss at Rs 19 cr, stock down 7%
Kerela based Dhanlaxmi Bank on Thursday reported a year-on-year net loss of around Rs 19 crore for the second quarter ended September 30, 2012-13; compared with Rs 4.3 crore net profit in the corresponding quarter of the previous year. This was the fourth consecutive quarter that the lender continued to post y-o-y losses.
November 17, 2012 / 10:15 IST
Moneycontrol Bureau
Kerela based
Dhanlaxmi Bank on Thursday reported a year-on-year net loss of around Rs 19 crore for the second quarter ended September 30, 2012-13; compared with Rs 4.3 crore net profit in the corresponding quarter of the previous year. The bank's lossess came on the back of higher provisions against bad loans, which rose from Rs 5.31 crore to more than Rs 29 crore y-o-y. This was the fourth consecutive quarter that the lender continued to post y-o-y losses. Dhanlaxmi Bank shares plunged 7% to close the day's trading at Rs 58.75 after hitting intraday low of Rs 58.10 on NSE.Dhanlaxmi's net interest income (NII) or the difference between interest earned and paid out was down at Rs 58 crore versus Rs 68 crore, y-o-y. Its loan book contracted more than 25% to around Rs 7,540 crore. Its gross non-performing asset ratio rose sharply to 3.57% y-o-y compared with 0.55% in Q2, FY12 and 1.39% in Q1, FY13. Net NPA ratio stood at 2.50% as against 0.17% a year ago. Earlier in this year, the old generation private sector lender had gone through a management change. Amitabh Chaturvedi had quit the bank as managing director and chief executive officer on February following alleged differences with the bank’s board on a range of issues relating to business strategies. Later, P G Jayakumar had assumed the charge of MD. He had resorted to cost cutting measures while assuring revivel of the bank in 3-6 months. He had also mentioned of increasing retail deposits. During the July-September quarter, operation expenses nearly halved to Rs 69 crore from Rs 112 crore a year back. However, deposits de-grew by more than 21% to around Rs 10,840 crore."It may take another 3-6 months to turn the bank profitable by cleaning its books. The new management is apparently working on it. Meanwhile, the buzz of the bank's acquisition by a larger bank refuses to scale down. However, I do not find the lender attractive enough to be taken over. Besides declining business, it has got some union issues as well," said a banking analyst from a large doemstic brokerage, which does not cover Dhanlaxmi Bank actively. Its capital adequacy ratio was at 10.9% in Q2, FY13 versus 10.36% in Q1. Recently, the bank board has approved raising Rs 200 crore via qualified institutional placement (QIP). saikat.das@network18online.com Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
