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Corporation Bank: 4Q net down 18% - Views on News from Equitymaster
 
 
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  • Jun 6, 2001

    Corporation Bank: 4Q net down 18%

    Corporation Bank's fourth quarter profits dropped by 18% due to a significant reduction in operating margins and higher provisioning for NPAs.

    (Rs m) FY00 FY01 Change 4QFY00 4QFY01 Change
    Interest Income 16,044 18,045 12.5% 4,230 4,716 11.5%
    Other Income 2,708 2,921 7.9% 841 921 9.5%
    Interest Expenditure 11,461 12,232 6.7% 2,857 3,307 15.7%
    Operating Profit (EBDIT) 4,583 5,813 26.8% 1,373 1,409 2.6%
    Operating Profit Margin (%) 28.6% 32.2%   32.5% 29.9%  
    Other Expenditure 3,040 3,414 12.3% 898 949 5.7%
    Profit before Tax 4,251 5,321 25.1% 1,316 1,381 4.9%
    Provisions & Contingencies 873 1,351 54.8% 389 546 40.4%
    Tax 1,054 1,352 28.2% 377 382 1.2%
    Profit after Tax/(Loss) 2,325 2,618 12.6% 550 453 -17.6%
    Net profit margin (%) 14.5% 14.5%   13.0% 9.6%  
    No. of Shares (eoy) 120 120   120 120  
    Diluted Earnings per share* 19.4 21.8   18.3 15.1  
    P/E (at current price)   6.3        
    *(annualised)            

    The bank's interest income continued to grow in double digits and on an aggregate was up 13% for FY01. However, higher cost of funds depressed margins. This has resulted in a marginal 3% growth in operating profits in the fourth quarter. On a year on year basis OPM rose by 360 basis points.

    A 55% rise in provision amount for FY01, resulted in a slow growth in profits at 13%. Higher provision could be due to adverse industry and capital market scenario in the last fiscal.

    At the current market price of Rs 138 Corporation Bank is trading at a P/E of 6x FY01 earnings and a Price/Book value ratio of 1.2x.

     

     

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