Net up 13%, Dena Bank cuts forecast for fiscal

By: | Published: February 7, 2015 12:07 AM

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.

Dena-Bank

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.

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