After recording consistent high growth rates in net profit and deposits, Global Trust Bank might just be hitting the rough patch, thanks to the U-turn in interest rates. It remains to be seen how GTB manages to sustain its growth in the current financial year. This private sector bank, which had come out with a par issue during August, 1994, has consistently recorded high growth rates in net profit and deposits. Its net profit has risen from Rs 14 crore in 1995 to Rs 40.36 crore in 1996 and further to Rs 57 crore in 1997.

Deposits, in particular, have grown by 72 per cent to Rs 2,279 crore in 1996-97 from Rs 1324 crore in the previous year. But advances, in line with the industry, have grown by a meager 6.2 per cent to Rs 1,462 crore. The imbalance between deposits and advances may work against the bank, unless it is in a position to raise low cost deposits and advance loans at competitive rates. With prime lending rates in the region of 14-15 per cent in the banking sector and the easing of liquidity squeeze, the bank could face challenges vis-a-vis business expansion.

It interest income as well as interest expenses have more than doubled during 1996-97. Other income has made a significant contribution to the extent of Rs 90 crore in its total income of Rs 446 crore. Buoyed by a 66 per cent growth in other income, net profit has risen by 42.5 per cent. The bank's total operational expenditure has almost doubled from Rs 27 crore to Rs 53 crore, while provisions and contingencies have gone up from Rs 21 crore to Rs 46 crore.The bank has stepped up its dividend from 12 to 15 per cent. The scrip has not seen much of an activity and is hovering around Rs 38.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.