Reports Rs12.15 cr profit for Q2 after 3 quarters of loss
THRISSUR: Negative provisions to the tune of Rs18.19 crore in the quarter ending September 30, 2018 helped Dhanlaxmi Bank turn the tides and report a net profit of Rs12.15 crore for the period, after having tasted losses for the past three quarters in a row.
It was quite ‘intriguing’ that the share price of the bank had surged by more than 40 per cent in the past three days up to Friday, as if the market had the prescient knowledge about the bank’s performance this time around.
The bank has generated interest income of Rs244.64 crore for the quarter under review compared with Rs239.92 crore in the previous quarter and Rs259.16 crore for the same quarter last year.
In fact, the bank had posted a loss of Rs6.04 crore on an operating level before moving into profit with the support of negative provisions. The Q2 financial result will certainly be viewed as a shot in the arm for Dhanlaxmi, which has earned the bad reputation of being the lone prompt corrective action (PCA) member among the private sector banks.
The non-performing loans (NPLs) still remain a pain point for the bank with the gross NPA standing at 7.81 per cent though the net NPA is not that worrying at 2.92 per cent. But the most encouraging aspect with regard to bad loans is that Dhanlaxmi enjoys the highest provision coverage ratio (PCR) among the Kerala-based banks at 82.50 per cent.
With the total equity at Rs716.72 crore, the bank sits on a decent capital adequacy ratio (CAR) of 14.16 per cent as of September 30, 2018 and total assets at Rs11,972 crore.