Dhanlaxmi Bank makes Rs 4 cr profit in Q3 on low staff cost

Moneycontrol Bureau

Kerela-based Dhanlaxmi Bank turned profitable in the third quarter (October-December, 2012-13) recording a net profit at Rs 4.4 crore as against a net loss of Rs 37 crore a year ago, on the back of lower employee cost that dropped to Rs 45 crore compared with Rs 73 crore in Q3, FY13.

In the recent past, a slew of senior management officials left the bank resulting in lower salary bill. A year back, Amitabh Chaturvedi (the then MD) led management was replaced by the old management based in Kerela.

Even though the bank reported a net profit after a long spell, its asset quality looks fraught with huge stress. Gross non-performing asset (NPA) ratio worsened significantly from 0.77% to 4.19% year-on-year. Provisions for bad loans zoomed from Rs 41 lakh to about Rs 10 crore y-o-y. Net NPA ratio shot up to 2.93% as against 0.35% during the same time.

Net interest income or the difference between interest earned and paid out, rose more than 17% to Rs 75 crore. However, the bank did not provide the loan and deposit growth figures for the reporting quarter. Repeated attempts to get the information did not yield any response till the time of writing this copy.

At 13:40 hours IST, Dhanlaxmi Bank shares rose nearly 3% to Rs 65 on NSE. In the last one year, those increased merely 10% as against a rise of 28% in the Bank Nifty, the broader index for banking stocks.

Among market participatns, the lender was touted as a potential target for acquisition. However, the new management refuted such claim.

saikat.das@network18online.com