Kerala Financial Corporation posts record profit


Trivandrum: Kerala Financial Corporation (KFC) has scaled new heights by registering the highest ever profit of Rs.45.65 crores for the financial year 2011-12. The Corporation also increased the size of its assets from Rs.1,124 crores to Rs.1,240 crores during this period. Buoyed by the all-time best performance, a dividend of 7.5% on paid up capital was declared by the Corporation in its Annual General Meeting held on July 11, 2012.

The dividend translates into an amount of Rs.15.90 crores with a major part going to Government of Kerala which owns more than 97% of the equity share capital. This is the highest dividend declared by any PSU in the State. The Corporation had huge accumulated losses just about three years back.

According to Yogesh Gupta IPS, Chairman & Managing Director, KFC, the improvement in its appraisal methods, introduction of objective credit rating system, etc. has tremendously increased the quality of its assets and advances and the Corporation has been able to reduce its gross NPA from 8.20% to 3.60% and net NPA from 1.88% to 1.30%.

The Corporation also formulated scientific, rational and modern policies for sanction of loans, their monitoring and recovery. Forward looking compromise settlement and recovery policies ensured that the recoveries for 2011-12 reached an all-time high figure of Rs.467.17 Crores. The total income at Rs.214.25 Crores saw an increase of 30%, up from Rs.165.98 in 2010-11.

The Corporation has been able to achieve this performance despite reduced financial assistance from SIDBI.  However, the improved performance of the Corporation and confidence in its management ensured that banks agreed to lend to KFC at a very economic rates. Further, the reduction in its establishment costs has enabled KFC to earn profits despite keeping low lending rates. The effective rate after rebate and reduction of interest rate for good credit rating is only 12.5% as against around 16% charged by other banks.

As at the end of the year 2011-12 the net worth of the Corporation was Rs.325.85 crores up from RS.297.36 crores in the previous year. The Corporation has Capital Adequacy Ratio (CAR) of 20.51% which is far above the minimum norm of 9% prescribed by the RBI.

Kerala Biz News


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