Said Corporation Bank's chairman and managing director, RS Hugar: "The bank will able to fully absorb the total impact of the new prudential measures on provisioning and capital adequacy ratio due to its intrinsic financial strength, quality of assets and prudent management". Hugar added that despite additional provisioning of Rs 20 crore, the bank will able to meet an envisaged net-profit of Rs 220 crore.

To supplement its spreads and sustain profits (half year 1998-99 at Rs 106.73, up by 25 per cent over the corresponding period in the previous fiscal), Corporation Bank is reviewing in funding costs and embarked on special drives to increase low-cost deposits.

The bank's NPA stood at 2.7 per centas on September 30, 1998, down from the 2.9 per cent and 3.6 per cent at end-March'98 and end-March'97. "This is expected to touch a low of 2.5 per cent at the end of the current fiscal," said Hugar, "which may be the lowest among public-sector banks."

In a press release issued on Monday, the bank claimed that it had undertaken an account-wise review of its large borrowers, which revealed a very low exposure to recession-struck industries, and further that it had achieved a 92 per cent of the cash-recovery target set for the first-half of the current fiscal. Corporation Bank said that it was confident of effecting cash-recovery of over Rs 50 crore for the full year, which is 20 per cent higher than that in the previous fiscal.