Corporation Bank posts 34 pc rise in net profit

MUMBAI, JAN 19: Corporation Bank has recorded a 34 per cent growth in net profit during the nine-month period ended December 1997 to Rs 125.84 crore from Rs 92 crore in the corresponding period of the previous year. The bank made a net profit of Rs 125.13 crore for the financial year 1996-97.R S Hugar, chairman & managing director, Corporation Bank, said here that the bank’s performance during the year will exceed the projections made during the public issue.

As per the unaudited financial results, the bank has posted 24.2 per cent increase in the operating profit which touched Rs 230.27 crore as against Rs 185.41 crore in the corresponding period of the previous year and Rs 245.95 crore for 1996-97 (entire year). However, there has been a slowdown in credit disbursements. Disbursements amounted to Rs 55 crore as compared to Rs 165 crore sanctions. The bank’s non-performning assets too have increased due to and poor corporate performance. “Aquaculture, chemical and diamonds sectors have shown some problems. The chemical units had some repayment problem due to the Supreme Court judgement on pollution control,” he said.

The bank has decided to reduce its exposure in the diamond sector. “As against 8 per cent of our total exposure to diamond sector a few years ago, our current exposure is limited to 4 per cent of total advances,” he said.

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The bank registered a turnover of Rs 40,100 crore during the nine-month period in its Cash Management Services market. Around 587 corporate clients are using the service.

As part of its plan to diversify into gold trade, Corporation Bank has opened a gold desk at Mumbai. It has already started marketing gold and launched dealings at Ahmedabad, Bangalore, Delhi, Mangalore and Mumbai. The total turnover in gold banking has exceeded Rs 60 crore and the bank is expecting a total business of Rs 250 crore for 1997-98. The bank has plans to expand gold business including retail sales in other major centres.