Dena Bank cut its fiscal 2015 growth forecast as a weak economy pushed down its credit growth...
Dena Bank cut its fiscal 2015 growth forecast as a weak economy pushed down its credit growth and asset quality deteriorated significantly on a sequential basis, mirroring the results shown by other banks for the quarter ended December 31.
The bank had initially provided a growth outlook of 16% to 18% for the current fiscal, but on Friday Dena Bank CMD Ashwini Kumar said it now expects the rise to be around 12-13% on balance sheet size.
“The industry is going through a turbulent phase right now. With ordinances being issued, we are hopeful that the economy will improve,” Kumar said during the bank’s earnings press conference.
Net profit for the quarter ended December 31 rose nearly 13% y-o-y to R76.56 crore. Net interest income for the quarter rose 5.4% to R2,671.1 crore.
Asset quality deteriorated with gross NPAs rising 9.5% to R4,229.92 crore while NPA rose 10.6% to R2,928.54 crore. Gross NPA ratio stood at 5.61% — an increase of 49 bps over the preceding quarter, sequentially. Fresh slippages during the quarter were R748 crore, a decrease of 25% q-o-q. Provisions fell 37% to R241.33 crore y-o-y.
The bank had put loans worth R529 crore up for auction during the quarter for asset reconstruction companies (ARCs), but could sell loans worth R11-12 crore, said Kumar. It will now re-price and re-auction the debts.
Total advances of the bank grew 7.8% y-o-y to R75,356 crore while retail credit grew 14.04% to R10,005.2 crore. Total deposits grew 11.3% y-o-y to R1,06,907 crore.