Kerala Financial Corporation registers highest profit

The Kerala Financial Corporation (KFC) has registered the highest- ever profit of Rs 45.65 crore for the financial year 2011-12.

The Corporation has also increased the size of the assets to Rs 1,240 crore from Rs 1,123 crore of the previous year. The sanctions registered a figure of Rs 539 crore and disbursements, Rs 464.57 crore.

The KFC has declared a dividend of 7.5 per cent on paid up capital. This translates into an amount of Rs 15.9 crore with a major part going to the State Government, which owns more than 97 per cent of the equity share capital.

Another Rs 2.58 crore of dividend tax is payable to the Union Government. This is the highest dividend declared by any of the PSUs in the state.

KFC chairman and managing director Yogesh Gupta said that the improvement in its appraisal methods and introduction of objective credit rating system had increased the quality of its assets and advances. The Corporation has been able to reduce its gross NPA percentage from 8.2 per cent to 3.60 per cent and the net NPA from 1.88 per cent to 1.30 per cent.

The Corporation has also formulated scientific, rational and modern polices for sanction of loans, monitoring and recovery.

Forward looking compromise settlement and recovery polices ensured that the recoveries for the year 2011-12 reached an all-time high figure of Rs 467.14 crore.

The total income also registered Rs 215.25 crore up from Rs 165.98 crore, achieved in the previous year. This performance has been achieved mostly during the second half of the financial year.

The Corporation has been able to achieve the performance despite reduced financial assistance from the SIDBI. The reduction in the establishment costs has enabled KFC to earn profits despite keeping low-lending rates, Gupta said.

At the end of the year 2011-12, the net worth of the Corporation was Rs 325.85 crore up from Rs 297.36 crore in the previous year. The Corporation has a capital adequacy ratio of 20.51 per cent, which is far above the minimum norm of 9 per cent prescribed by the RBI.