The fall in net profit has been attributed to a massive provisioning towards non-performing assets (NPAs), falling spreads, low growth in interest income, additional operating expenditures and provisioning on account of new wage pact (in case of banks).

Industrial Finance Corporation of India (IFCI) has registered the sharpest drop in its net profit which fell by 52.7 per cent to Rs 30.36 crore for the quarter ended June 30, 1999, down from Rs 64.22 crore in the corresponding period of the previous fiscal. The provision for bad and doubtful debt, fall in investments and high cost of borrowing effected the bank's bottomline.

Industrial Development Bank of India (IDBI), State Bank of India (SBI) and Bank of India (BoI) have posted massive drop in their net profits while Bank of Baroda (BoB), Corporation Bank and a clutch of listed public sector and new private sector banks have registered growth in their net profits. In case of term-lending institution ICICI, it posted a marginal growth in net.

The IDBI registered a 19.39 per cent drop in its net profit for the period at Rs 291 crore on account of fall in spreads, higher provisioning towards NPAs and large cash balances which could not be deployed. The institution's sanctions and disbursements dropped by 15.8 per cent and 30.6 per cent.

Higher provisioning also pulled down SBI's net profit by 18 per cent. The bank's operating profit fell by 0.7 per cent to 897.26 crore as against Rs 904.20 crore. According to bank analysts, an increase in NPA provisioning, additional operating expenditure, lowered growth in interest income and tight spreads effected the bank's net profit.

The list of banks and institutions which have posted growth in net profit includes Housing Development Finance Corporation (HDFC), IndusInd, Corporation Bank, BoB, HDFC Bank, IDBI Bank and Oriental Bank of Commerce (OBC).

IndusInd Bank has registered a massive jump of about 62.15 per cent in its net profit at Rs 25.02 crore for the first quarter of the fiscal 1999-2000, up from Rs 15.43 crore in the corresponding period of the previous fiscal.

The bank's total income increased 8.4 per cent to Rs 188.58 crore from Rs 173.94 crore. The BoB registered a marginal jump of 2.98 per cent in its net profit to Rs 130.27 crore, up from Rs 126.50 crore in the corresponding quarter of the previous fiscal due to a healthy increase in its interest income. The bank's interest income increased by 5.7 per cent to Rs 1,236.98 crore from Rs 1,170.37 crore.

Ditto was the case of Dena Bank. The bank's net profit increased marginally owing to increase in its interest income by 11.8 per cent. The bank has registered a interest income of Rs 430.43 crore, up from Rs 385.04 crore in the previous year.