Lakshmi Vilas Bank’s net profit rose 70% for the third quarter ended December 31, 2016, and the lender announced plans to raise betweeen ₹600 crore and ₹700 crore to meet its working capital requirements. Net profit increased to ₹78.38 crore from ₹46.07 crore due to a reduction in costs of funds, steady net interest margin and satisfactory treasure operations, according to the bank. Total income of the bank increased by 21% to ₹879.26 crore from ₹723 crore, said Parthasarthi Mukherjee, LVB Managing Director and CEO. While the bank saw significant increase in current account and savings account deposits, advances did not match up its expectations due to demonetisation. “The lending book did not grow. The yield on lending was flat. We did not push for growth for the sake of growth, as our focus was on quality growth,” Mr. Mukherjee said.
LVB reported an increase gross non-performing asset from 1.82% to 2.78% at ₹549 crore and net non-performing asset from 0.80% to 1.82% to ₹354 crore.
“Demonetisation also led to prepayment of loans and there was a slowdown in advances. We did see some extent of our stressed loans getting prepaid. It was a positive for us. During the quarter, there was a fresh slippage of ₹87.76 crore and at the same recovered NPA of ₹81.30 crore,” he said.
Referring to bill discounting fraud of ₹75 crore reported in the second quarter, Mr. Mukherjee said they had recovered the amount along with interest. Reserve Bank had imposed a monetary penalty. It was paid and a provision was made during the current quarter.
Having raised ₹168 crore recently through qualified institutional placement, LVB will be raising another ₹600-700 crore after September 2017 to meet its further working capital needs.
The Capital Adequacy Ratio of the bank under Basel III stood at 10.21% and Basel II at 10.42%, he said. — Special Correspondent
