Kerala Bank Scores Record Profit Despite Ratings Downgrade

Kerala Bank achieved a net profit of Rs 209 crore in 2023-24 despite a ratings downgrade by NABARD. Cooperation Minister V N Vasavan addressed concerns raised by Opposition Leader V D Satheesan regarding non-performing assets and insufficient inspection. Vasavan assured that primary cooperative banks receive necessary support from Kerala Bank.

Kerala Bank has reported a record net profit of Rs 209 crore for the fiscal year 2023-24, marking a notable rise in deposits, loans, and overall business, according to state Cooperation Minister V N Vasavan.

Responding to the Opposition Leader V D Satheesan in the State Assembly, Vasavan addressed concerns over NABARD's decision to downgrade the bank's rating from 'B' to 'C' for the year 2022-23. The downgrade, based on non-performing assets exceeding 11%, was flagged during an inspection.

Satheesan highlighted the increased non-performing assets, which have surpassed 11% compared to the benchmark of 7%, and accused Kerala Bank of inadequately supporting primary cooperative banks. However, Vasavan countered these allegations, stating that Kerala Bank has been supporting these banks as per RBI guidelines, and assured that the rating issues would be resolved in the 2023-24 inspection.

Vasavan emphasized that the rating downgrade will impact only personal loans, which now have a cap of Rs 25 lakh, but will not affect other loan categories, such as MSME, long-term agriculture-gold loans, and housing loans. He also highlighted that despite the downgrade, Kerala Bank has been profitable annually, noting an increase in profit from Rs 20 crore last year to Rs 209 crore this year.

(With inputs from agencies.)