Corp Bank

Corporation Bank stock price tumbled down after it posted a set of disappointing numbers for Q2FY14. The PSU bank’s net profit for the quarter dropped by a whopping 96% (YoY) at Rs.15.5 crore. The fall in net profit can be directly attributed to the rise in provisioning, which sequentially jumped up 57%  and by a shocking 160% on YoY at Rs.700 crore. This, QoQ, is an increase of Rs.369 crore and the bank has stated that this was “due to extraordinary requirement towards investment depreciation and higher provision towards non-performing assets (NPAs).

NII was up 13% (YoY) at Rs.910 crore but that brings little solace given the fact that its asset quality has also deteriorated. Gross NPA has risen 80 bps (QoQ) and 120 bps on YoY at 3.17% and Net NPA rose 55 bps (QoQ) and 82 bps (YoY) at 2.20%. Slippages during the quarter stood at Rs 1,139.80 crore and this is a 4% (YoY) rise. The Bank has lined up a five pronged strategy to improve its asset quality and performance – improvement in CASA, better credit with focus on MSME, agriculture, retail, focus on new customers, increase reach by opening more branches and ATMs and improve the asset quality.