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Mumbai, July 29: Buoyed by the rise in income, Dena Bank registered a 201 per cent growth in its first quarter net profit at Rs 55.58 crore, against Rs 18.49 crore in the corresponding quarter of the previous year.

Mr P.L. Gairola, Chairman and Managing Director, attributed the growth in net profit to a rise in operating income. “Interest and non-interest income have shown strong growth this quarter,” he said.

Interest income

Net interest income grew by13.85 per cent to Rs 224.69 crore from Rs 197.36 crore a year ago.

Total income for the quarter ended June 2007 increased 30 per cent to Rs 702.42 crore, compared with Rs 539.61 crore in the year-ago period.

Non-interest income registered a 21 per cent growth to Rs 75.17 crore (Rs 62.21 crore).

Gross advances jumped 20.27 per cent to Rs 18,255 crore (Rs 15,178 crore) and total deposits increased 16 per cent to Rs 27,968 crore (Rs 24,171 crore).

The increase in advances was driven by a 40 per cent growth in retail credit and 30 per cent jump in loans to small and medium enterprises.

Mr Gairola said the bank would take a view on deposit rates by July 30.

Deposit rate cut

“A cut of 50-75 basis points in deposit rates across maturities of 90 days and above is due. The bank will decide on a downward revision of the prime lending rate in a fortnight or so,” he said.

The bank’s net interest margin in the first quarter declined to 3.11 per cent (3.22 per cent).

The cost of deposits went up 0.91 percentage point to 5.57 per cent while the yield on advances was higher by 1.99 percentage point at 10.02 per cent.

The net non performing assets (NPAs) fell by 1.18 percentage point to 2.07 per cent.

The Chairman said he hoped to end the year with a net NPA of 1 per cent.

Dena Bank’s capital adequacy ratio stood higher at 11.9 per cent (10.46 per cent).

Mr Gairola said that the bank had headroom to raise a total of Rs 775 crore under Tier I and Tier II capital.

The capital will be raised based on the market conditions, said a senior bank official.

Dena Bank has a low credit card base of 10,000 and Mr Gairola said the bank was toying with the options of either exiting the business or finding a partner.

“We are in talks with SBI for issuing a co-branded credit card but an agreement is yet to be finalised,” he said.

The bank hopes to end the year with an overall business growth of 22 per cent, Mr Gairola said.