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Corporation Bank net surges by 21% in FY2000 - Views on News from Equitymaster
 
 
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  • May 26, 2000

    Corporation Bank net surges by 21% in FY2000

    Corporation Bank has clocked 21% growth in its net profits to Rs 2.3 bn for the FY2000 over the previous period. Bank's operating profit margins increased by 100 basis points to 28.6%. Inspite of adverse market condition, the bank has been able to sustain its interest spread ratio to 3%.

    During the year, the bank's deposits showed a modest growth rate of 13% to Rs 142.8 bn while advances recorded significant growth rate of 24% to Rs 77.8 bn. The modest growth in deposits is attributed to the shedding of high cost deposits in favour of stable deposits.

    (Rs m) FY1999 FY2000 Change
    Interest Income 13,502 16,044 18.8%
    Other Income 2,046 2,708 32.4%
    Interest Expenses 9,782 11,461 17.2%
    Operating Profit (EBDIT) 3,720 4,583 23.2%
    Operating Profit Margin (%) 27.6% 28.6%  
    Other Expenses 2,707 3,040 12.3%
    Profit before Tax 3,060 4,251 38.9%
    Provisions 1,139 1,927 69.1%
    Profit after Tax/(Loss) 1,920 2,324 21.0%
    Net profit margin (%) 14.2% 14.5%  
    Earnings per share 16.0 19.4 21%

    The bank continued to show strong profitability with return on average assets of 1.5% and return on networth of 20.3%. Corporation Bank's net Non Performing Assets(NPAs) declined to 1.92% from 1.98% in the previous period. Also the capital adequacy ratio of the bank is higher at 12.8% as against 9% stipulated by RBI.

    At the current market price of Rs 57, the bank is trading at Price/Book value ratio of 0.6 times compared to 7.5 enjoyed by HDFC Bank and 3.6 times enjoyed by ICICI bank. The valuations will change once the bank gears up with latest technology adoption with initiatives like tele banking, internet banking and mobile banking.

     

     

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