Media Release 

Mangalore, May 8: “The economic slowdown could have a lagged effect on the credit quality and profitability of banks. The rapid credit growth at the onset of the global financial crisis and the subsequent downturn has put some pressure on the asset quality. The asset quality may come under further pressure if there are significant slippages in some restructured accounts- the possibility of which cannot be ruled out”, said P Jayarama Bhat, managing director, Karnataka Bank Limited.

He was speaking at the regional heads review conference organized at the head office to review the performance of the Regions for the Quarter ended March 2010.

He called upon the regional heads to focus mainly on the quality of assets and profitability in addition to mobilization of low cost deposits under CASA. Efforts to increase the share of SME in credit portfolio will go a long way in the sustained growth of credit. 

He cautioned the regional heads to ensure that in our zeal to increase /improve credit the quality of credit should not suffer. NPAs are a grave threat to profitability. He advised the members to concentrate on recovery, accelerated CASA growth, increase in the share of other income and also vigorous expansion of healthy credit portfolio. He reminded the regional heads of the introduction of Base Rate concept which will be a challenge to banks. He also rolled out the business plan for the year 2010-11.

General Manager P Jairama Hande welcomed the members and explained the performance highlights of the financial year 2009-10. 

General Managers Sarvashri K H Shivaswamy Aithal, N Upendra Prabhu, B Ashok Hegde and M V C S Karanth also spoke on the occasion.

N.R.Ravishankar, assistant general manager, gave a presentation with relevant facts and figures for the year ended March 2010. M Narayana Bhat, Chief Manager, proposed vote of thanks. Besides the nine regional heads, other executives at Head Office were present on the occasion.