Corporation Bank has 15% rise in interest income and net profits during the 1QFY01 with improved operating margins. The improvement in the margins is due to less than proportionate rise in the interest expenditure. The lower growth in profits is due to higher provisions made for contingencies which has increased by 49% to Rs 554 m.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Provisions & Contingencies
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (eoy) (m)
Diluted number of shares
Diluted Earnings per share*
The deposits of the bank during the 1QFY01 grew by 6% to Rs 142 bn and advances increased by 21% to Rs 75 bn. The bank has the lowest NPA ratio among the public sector banks of 1.9% as on March 2000. It plans to reduce the ratio further by the end of the current fiscal.
Although the bank has automated around 80% of its business, they are nowhere in league with the new private banks. Still they are appreciable considering the government holding of 68.3%. This is also one of the reasons for its comparatively lower valuations
At the current market price of Rs 81, the Bank is trading at a P/E of 4 times its 1QFY01 annualised earnings. Its Price/Book value ratio of 0.9 times is comparatively less than other private sector and public sector banks. The valuations will change once the bank gears up with latest technology adoption with initiatives like tele banking, internet banking and mobile banking.x
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