Dena Bank Q2 net down 55% as stressed asset provisions rise

[Editor: Exit Dena Bank Ltd at the CMP of Rs.59.55 and enter Allahabad Bank Ltd at Rs.91.20 or UCO Bank Ltd at Rs.74.75]

Mumbai, November 9, 2013: Mumbai based public sector lender Dena Bank has posted a 55.19 per cent drop in net profit at Rs 107.38 crore for the second quarter ended September 2013 on sharp rise in provisions for stressed assets.

The net profit for second quarter of 2012-13 stood at Rs 239.64 crore. The net interest income for the quarter rose by just 4.7 per cent to Rs 625.17 crore.

The provisions, excluding tax and contingencies, for the quarter more than tripled to Rs 335.19 crore from Rs 104.5 crore in July-September 2013.

The asset quality deteriorated with net slippages of Rs 210 crore in the reporting quarter. The tally of gross non-performing assets rose to Rs 1,968 crore (3 per cent of assets) from Rs 1,757 crore (2.7 per cent) at end of June 2013.

Ashwani Kumar, chairman and managing director said b ank has initiated close monitoring of borrowal accounts to prevent slippages. At present, bank is monitoring all accounts above Rs 10 crore on daily basis.

Its deposits were up by 12.11 per cent to Rs 93,669 crore as on September 30, 2013 while advances increased 10.54 per cent to Rs 65,664 crore .

Dena Bank is targeting credit growth of 17 per cent and deposit growth of 14 -15 per cent. It expects to maintain Net Interest Margin (NIM) in the range of 2.75-3.00 per cent for FY14, he said.

Its capital adequacy under Basel III norms stood at 10.21 per cent at end of September 2013.

Courtesy: Business Standard