New Delhi, Jul 27 (PTI) Private sector Karnataka Bank on Tuesday reported a nearly 46 per cent fall in net profit at Rs 106.08 crore for the quarter ended June 2021, mainly on account of decreased treasury income.

The lender's net profit stood at Rs 196.38 crore in the year-ago period.

Total income from operations dropped to Rs 1,759.41 crore, as against Rs 2,134.63 crore in Q1 FY21, Karnataka Bank said in a regulatory filing.

Sequentially, profit grew by 238.26 per cent from Rs 31.36 crore in the March 2021 quarter.

"However, on year on year basis the profit declined by 45.98 per cent, mainly on account of decreased treasury income," it said.

Interest income fell to Rs 1,523.50 crore during April-June period of 2021-22, from Rs 1,615.71 crore a year ago.

Provisions and contingencies for the reported quarter were brought down to Rs 368.08 crore from Rs 509.07 crore.

The bank's asset quality showed impairment on a gross basis, as the non-performing assets (NPAs) rose to 4.82 per cent of the gross advances by end of June 2021 from 4.64 per cent in the year-ago period.

Net NPAs or bad loans were stable at 3 per cent as compared to 3.01 per cent.

Sequentially, the bad loans proportion fell in both the cases.

Capital adequacy ratio improved to 14.58 per cent as compared to 13.44 per cent as of June 30, 2020, it said.

"Inspite of the hardships posed by the second wave of Covid-19 pandemic, bank has been able to continue its satisfactory performance during the first quarter of the current year also," said Mahabaleshwara M S, managing director and CEO of the bank.

The core business is expected to do well going forward, besides further improving the asset quality, he added.

The board of the bank also approved raising further capital through qualified institutional placement (QIP) of up to 150,000,000 equity shares.

It also approved raising the borrowing power by issuing debt securities (subordinated tier 2 bonds) in order to augment capital of the bank.

Karnataka Bank said it will seek shareholders' approval on these two resolutions in the ensuing annual general meeting in September.

The bank's stock closed 1.17 per cent down at Rs 59.05 apiece on BSE.

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