Quarterly Results: Dhanlaxmi Bank Q3 net plunges 44.5% on higher wage bill

By: |
February 10, 2021 3:41 AM

Provisions for wages and pensions of the Thrissur-based lender has increased by 40% YoY to touch Rs70.27 crore as against Rs50.13 crore reported in the year-ago period.

Dhanlaxmi BankDhanlaxmi Bank had reported a net profit of Rs21.28 crore in the third quarter of last fiscal and Rs14.01 crore in the second quarter of FY21.

Dhanlaxmi Bank on Tuesday reported a 44.5% year-on-year decline in its third-quarter net profits to Rs11.8 crore mostly on higher wage bill and lower interest income.

Provisions for wages and pensions of the Thrissur-based lender has increased by 40% YoY to touch Rs70.27 crore as against Rs50.13 crore reported in the year-ago period. The lender had reported a net profit of Rs21.28 crore in the third quarter of last fiscal and Rs14.01 crore in the second quarter of FY21.

JK Shivan, MD & CEO of the bank told FE that provisions for higher wage bill and slippages led to a decline in the profits. Total advances of the bank are seen marginally lower at Rs7099 crore, while corporate advances have come down by 13.92 % YoY.

Gold loan portfolio has increased by 48.64 % YoY and now stands at 26.06 % of the total loan book. Shivan added that the bank will increase its corporate advances in the current quarter. Total income stands flat at Rs286.21 crore as against Rs285.85 crore in the year-ago period.

Interest income has declined by Rs13.52 crore year-on-year to Rs237.36 crore, while other incomes have increased to Rs48.85 crore from Rs34.97 crore reported in the year-ago period.

On the asset side, the lender reported an improvement with gross non-performing assets (NPA) as a percentage of gross advances at 5.78 % from 6.36 % in the preceding quarter.While net NPA declined to 1.11 % in the December quarter from 1.66 % in the September quarter.

Provision Coverage Ratio of the bank as on December 31, 2020, was 92.68%.

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