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GTB posts Rs 22 cr net loss in Q4 -- Earmarks funds to cushion future shocks in capital market


Our Bureau

HYDERABAD, April 30

GLOBAL Trust Bank Ltd (GTB) has registered a fall of 26 per cent in net profit for the year ended March 31, 2001 and incurred a net loss of Rs 22.71 crore for the last quarter, largely owing to huge provisions of Rs 120.34 crore made during the year, whi ch includes Rs 55 crore of additional provisions and reserves.

On a total income of Rs 1,061.94 crore for the year, the bank posted a net profit of Rs 80.33 crore as against an income of Rs 879.12 crore and a net profit of Rs 108.62 crore in the previous year.

During the last quarter ended March 31, 2001, the bank incurred a net loss of Rs 22.71 crore on a revenue of Rs 301.06 crore as against a profit of Rs 35.33 crore on an income of Rs 308.81 crore in the corresponding quarter of previous year.

Of the total provisions and contingencies of Rs 109.94 during the year, the bank provided Rs 90.46 crore in the last quarter alone. The bank has recorded net NPAs of 3.75 per cent during the year, as against 0.87 per cent in the previous year and a fall in capital adequacy ratio at 12.71 per cent from 13.68 per cent in the previous year.

Addressing a press conference here on Monday, immediately after the board meeting, the GTB Chairman and Managing Director, Mr R.S. Hugar, said the bank has registered deposits of Rs 7,734.23 crore during the year (Rs 6,198.85 crore), while the advances s tood at Rs 4,099.69 crore (Rs 3,219.02 crore).

The fall in operating profit at Rs 200.77 crore during the year compared to Rs 248.03 crore in the previous year was attributed mainly to the drop in interest income on SLR investments and advances which was in line with the lower interest rate regime.

According to Mr Hugar, the bank has adopted an extremely conservative policy of making provisions during the year under review. It made provisions of Rs 79.82 crore as required as per regulatory norms as at March 31, 2001.

``Considering the bank's presence in the capital market segment and its temporary downtrend, the bank has proactively made an ad hoc provision of Rs 50 crore over and above the requirement, though the capital market assets at this point time are not tech nically NPAs,'' Mr Hugar said.

Further, according to Mr Hugar, as a matter of caution, a special contingency reserve of Rs 20 crore was created to meet any eventuality in the capital market fluctuations in future, taking the total NPA provisions and reserves up by Rs 70 crore to reac h Rs 149.82 crore as on March 31, 2001.

According to Mr Hugar, the conservative and consolidation outlook has also governed the dividend policy of the bank. The board has recommended a dividend of 15 per cent for the year, as against 22 per cent in the previous year.

``Though the profits of the bank permit for the maintenance of a similar dividend this year also, the board has taken this view to strengthen the reserves and to create long-term value for the shareholders.''

Aimed at further improving the organisational effectiveness, GTB proposes to set up an assessment centre which would help in precise profiling, role positioning and individual development. Further, to bring in `out of box thinking' and fresh perspectives to the business, the bank proposes to induct professionals wherever required.

As part of this, Mr Justice K.A. Swami, former Chief Justice of Chennai High Court, was inducted on the GTB board here on Monday. The former Chairman and Managing Director of SIDBI, Dr Sailendra Narain, would also be joining the GTB board in the due cour se, Mr Hugar said.

Picture: The Global Trust Bank Chairman, Mr R.S. Hugar, and the Executive Director, Mr Sridhar Subhasri, at a news conference in Hyderabad on Monday.

Picture by A. Roy Chowdhury

Related links:
GTB third quarter net up to Rs 34 cr
Global Trust Bank H1 net up 51 pc
Global Trust Bank net up 53 pc, to pay Rs 2.2

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