Dena Bank net profit falls 51%, bad loans soar

Mid-sized state-run lender Dena Bank on Monday reported about 51 per cent decline in net profit at Rs 52 crore for the September quarter on account of higher provisions for bad assets.

The bank had registered net profit of Rs 107.38 crore in the July-September quarter of the previous fiscal, 2013-14.

"Our profit was impacted by higher provisions of Rs 352 crore, which we made during the quarter for non-performing assets, against Rs 109 crore in the year ago period," Dena Bank Chairman and Managing Director Ashwani Kumar told reporters.

Its asset quality worsened in the period with gross NPAs at 5.12 per cent, which includes the Rs 250 crore-fixed deposits fraud at its Malabar Hill branch.

Net NPAs stood at 3.59 per cent during the quarter. In the year ago period, its gross bad loans ratio stood at 3 per cent, while net NPA stood at 2.02 per cent.

The total income has increased from Rs 2,599.94 crore for the quarter ended September 30, 2013 to Rs 2,885.22 crore for the quarter ended September 30, 2014, the bank said.

Earlier this year, the CBI had unearthed Rs 250 crore fraud at the bank wherein the branch manager and a private person allegedly took loans using forged documents on behalf of seven private companies which had deposits in the bank.

Without the fraud, gross NPAs would have been 4.83 per cent, Kumar said, adding that the bank made a provision of Rs 42 crore for the Malabar Hill fraud case.

Bank's fresh slippages rose to Rs 1,000 crore and with the Malabar Hill fraud case, the slippages totalled to Rs 1,200 crore.

Net interest margins declined to 2.32 per cent from 2.57 per cent year-ago, and the bank is targeting its NIM to improve to 2.75-3 per cent by March-end.

The bank said Rs 450 crore of restructured accounts slipped into non performing assets during the period. The biggest restructured account which slipped into NPA was telecom tower company GTL, worth Rs 180 crore. The bank also has exposure of Rs 60 crore to its subsidiary, GTL Infrastructure, but the account remains standard so far, he said.