Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
GTB: Profits dip again - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Aug 6, 2002

    GTB: Profits dip again

    Global Trust Bank (GTB) has again reported a dismal performance for the quarter ended June 2002. The bank's first quarter profits declined by over 20% and interest income was also down by 16%. Its net interest income however, witnessed a growth of 28% due to a steep reduction in interest cost.

    (Rs m) 1QFY02 1QFY03 Change
    Income from operations 2,004 1,686 -15.9%
    Other Income 606 305 -49.6%
    Interest expense 1,768 1,384 -21.7%
    Net interest income 236 302 27.9%
    Other expenses 382 406 6.3%
    Operating Profit (146) (104) -28.8%
    Operating Profit Margin (%) -7.3% -6.2%  
    Provisions and contingencies 280 72 -74.2%
    Profit before Tax 180 129 -28.0%
    Tax 17 - -
    Profit after Tax/(Loss) 163 129 -20.7%
    Net profit margin (%) 8.1% 7.7%  
    No. of Shares (m) 121.4 121.4  
    Diluted Earnings per share* 5.4 4.3  
    P/E Ratio   4.5  

    Apart from a decline in the bank's core interest income, fee based income also witnessed a sharp fall. The contribution of non-interest income to total income declined to 15% from 24% in FY02. While interest income recorded a dip, the bank's operating expenses continue to rise. Consequently, its cost to income ratio jumped to 67% in 1QFY03 from 45% in the comparable previous quarter.

    Interest income break-up
    (Rs m) 1QFY02 1QFY03 Change
    Interest on advances 1,130 950 -15.9%
    Income on investments 828 693 -16.4%
    Interest on balance with RBI 32 43 32.6%
    Others 14 0 -98.6%
    Total 2,004 1,686 -15.9%

    As part of its business restructuring, GTB aims to continue its thrust on quality growth, improve internal systems & procedures and enhance its portfolio of products & services significantly in FY03. Towards this end, the bank has taken up a number of steps including scaling down of exposure limits to capital markets, reconstitution of credit committees, reducing higher risk portfolios, reviewing and restructuring industry wise exposure and establishment of highly skilled corporate banking teams at strategic locations. The bank also aims to bring down its high cost deposits and reduce asset size.

    At the current market price of Rs 19, GTB is trading at a P/E of 5x 1QFY03 annualised earnings and price to book value ratio of 0.6x. Its capital adequacy ratio (CAR) at 11% is likely to assist the bank in its business expansion. However, it would take some time for the bank to rebuild its brand and attract business volumes.



    Equitymaster requests your view! Post a comment on "GTB: Profits dip again". Click here!


    More Views on News

    IDFC Bank: Strong Trading Income Shields Credit Slowdown (Quarterly Results Update - Detailed)

    Aug 10, 2017

    IDFC Bank is taking steps to address contracting NIMs and successfully transition in to a retail bank.

    ICICI Bank: Loan Slippages Trending Downwards (Quarterly Results Update - Detailed)

    Aug 10, 2017

    Asset quality will be the key thing to watch out for going forward.

    Axis Bank: Outside Watchlist Slippages a Big Worry (Quarterly Results Update - Detailed)

    Jul 31, 2017

    Almost 74% of the watchlist as provided by the bank of Rs 226 billion in FY16 has turned into non-performing assets.

    HDFC Bank: Asset Quality Deteriorates due to Farm Loan Waiver (Quarterly Results Update - Detailed)

    Jul 25, 2017

    Asset quality was under pressure on account of farm loan waivers. Despite the higher provisioning, the company reported a healthy profit growth of 20%.

    SBI: Merger Pushes up Bad Loans (Quarterly Results Update - Detailed)

    May 23, 2017

    State Bank of India (SBI) ended FY17 on a healthy note but concerns on bad loans from associate banks remain.

    More Views on News

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Profitable Investment in the History of the World(Vivek Kaul's Diary)

    Aug 8, 2017

    'Yes, it looks like a bubble. And, yes, it's like buying a lottery ticket. But there's something happening that has never happened before. It's an evolutionary leap in money itself.'

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    • Track your investment in GLOBAL TR. BANK with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks