Dhanlaxmi Bank Q4 profit falls over 90 pc at Rs 3 cr

New Delhi, Jun 22 () Dhanlaxmi Bank on Monday reported 90.5 per cent decline in net profit at Rs 2.60 crore for March quarter 2019-20 due to higher provisions for bad loans and contingencies.

The bank had posted a profit of Rs 27.61 crore in January-March period of the preceding financial year.

Income during the quarter under review rose to Rs 280.98 crore from Rs 268.97 crore in the year-ago same period, the bank said in a regulatory filing.

The bank's provisions for bad loans and contingencies were raised substantially to Rs 56.89 crore during March quarter as against Rs 16.27 crore parked aside for the year-ago same period.

The lender made an ad hoc provision of Rs 3.94 crore during the quarter towards the salary revision due from November 1, 2017, under 'Provisions and Contingencies', it said.

In 2019-20, Dhanlaxmi Bank's net profit grew multi-fold to Rs 65.78 crore from Rs 11.67 crore in 2018-19.

Income rose to Rs 1,100.44 crore from Rs 1,024.22 crore.

On the asset front, the bank showed improvement with gross non-performing assets (NPAs) falling to 5.90 per cent of the gross advances as on March 31, 2020 from 7.47 per cent by March-end last year.

In absolute terms, gross NPAs were Rs 401.22 crore, down from Rs 495.84 crore in the year-ago same period.

Likewise, net NPAs or bad loans too came down to 1.55 per cent (Rs 100.94 crore) from 2.41 per cent (Rs 151.71 crore).

The private sector lender said it exercised the option of moving to lower tax slab provided by the government in October 2019 and re-measured its deferred tax assets (DTA) as on March 31, 2020 and had a write-back of Rs 19.70 crore towards the same.

Dhanlaxmi Bank said that no divergence was observed by RBI for 2018-19 in respect of bank's asset classification and provisioning.

"Hence the bank has not exceeded the limit specified... on Divergence in the Asset Classification and Provisioning," it said.

On the COVID-19 impact, the lender said the extent to which the pandemic will impact the bank's future results will depend on related developments, which remain highly uncertain.

"Major challenges for the bank would arise from extended working capital cycle and dwindling cash flows. Despite these conditions, there is not likely to be any significant impact on the liquidity position of the bank," it said.

Further, it said that in accordance with RBI mandated moratorium facility to borrowers and the required provisions, it made the entire 10 per cent provision amounting to Rs 37.88 crore in March quarter 2020.

Provision coverage ratio as on March 31, 2020 was 89.87 per cent, it said.

Dhanlaxmi Bank stock closed 3.72 per cent up at Rs 16.16 on BSE. KPM ANU ANU