Public sector lender Corporation Bank on Friday said its consolidated net profit increased seven fold to Rs 420.83 crore in third quarter ended December 31, 2019 on higher interest income, albeit provisions for bad loans surged. The bank had posted a net profit of Rs 59.94 crore during the corresponding period a year ago.
Income increased to Rs 6,051.93 crore, from Rs 4,112.29 crore, the lender said in a regulatory filing.
On a standalone basis, the net profit increased to Rs 420.68 crore in third quarter ended December 31, 2019 from Rs 60.53 crore a year ago.
Notwithstanding that the bank's bad loan ratio has come down from the year-ago level, still it continues to remain elevated, the filing said.
In absolute terms, the gross NPAs stood at Rs 19,557.16 crore in the quarter under review, as against Rs 21,921.42 crore a year ago. Net NPAs were valued at Rs 6,321.81 crore, down from Rs 13,521.22 crore.
Despite fall in bad loan provisions, the bank kept aside a higher provision of Rs 1,300.35 crore for the quarter, compared with Rs 842.27 crore reserved for the year-ago quarter, the filing said.
During the quarter ended December 2019, the bank raised Basel III compliant tier II bonds amounting to Rs 1,000 crore, it added.
For the accounts covered under the provisions of Insolvency and Bankruptcy code (IBC), the bank has made a total provision of Rs 7,404.96 crore (100 per cent of gross NPAs) including additional provision of Rs 905 crore in said accounts as on December 31, 2019, the filing said.
For other accounts pending resolution, under the provisions of IBC, the bank is holding total provision of Rs 14,435.24 crore (96.35 per cent of gross NPAs), Corporation Bank said.
As per RBI norms, the bank has restructured and retained advances of Rs 632.05 crore as standard assets as on December 31, 2019 and made provision of Rs 31.60 crore as on December 31, 2019 in respect of such borrowers.
On migrating to the lower tax regime which was introduced by the government for the corporate sector in September, Corporation Bank said it is currently in the process of evaluating this option.
Provision coverage ratio of the bank at end of December 31, 2019 was 84.58 per cent as compared to 66.13 per cent as on December 31, 2018.
Also, Corporation Bank said it has accepted buy-back offer of its wholly owned subsidiary CorpBank Securities Ltd (an unlisted entity) to the extent of 25 per cent of its total paid-up equity share capital.
Stock of Corporation Bank was trading at Rs 25.85 on BSE, up 11.18 per cent from previous close.