Dhanlaxmi Bank, for Q3FY21 posted a 44% (YoY) decline in net profit at Rs.12 crore. And the blame for this lay on the 40% increase in provision for wages and pensions.

The Bank has implemented the salary revision, pursuant to agreement entered into between IBA and Workmen Unions and Officer's Association with effect from 1' November 2017. The amount of Rs.25 crore, required over and above the provisions already held in this regard has been charged to the 'Operating Expenses' during Q3FY21.

Its interest income has declined by Rs13 crore (YoY) to Rs237crore, while other incomes have increased to Rs49 crore from Rs35 crore.

In terms of asset quality, the Gross NPA improved from 6.36% to 5.78% (QoQ) while Net NPA was at 1.11% v/s 1.66%.

The bank has set aside Rs 20 crore v/s Rs.24 crore (YoY) as provision for bad loans and contingencies for the quarter. The Bank has made an ad-hoc provision of Rs 37.08 crore towards those accounts that were not to be categorised as NPA during March-August as per COVID-19 regulatory package announced by the RBI.

Provision coverage ratio (including technical write off) was 92.68% end of Q3FY21.

The stock is not doing too bad despite the fall in profit. It opened slightly lower at Rs.14 from yesterday’s close of Rs.14.04 and went down to Rs.13.60 where it is currently hovering. Its 20% LC is at Rs.11.24.