Vijaya Bank net up 10 per cent on interest income

The bank's net interest income improved an impressive 29%, riding on a 27% surge in operating profit at Rs 272 cr

Bangalore-based public sector lender Vijaya Bank has reported a 10 per cent increase in net profit at Rs 136 crore for the quarter ended September. The bank’s net interest income improved an impressive 29 per cent, riding on a 27 per cent surge in operating profit at Rs 272 crore. Total income for the quarter grew 22 per cent to Rs 2,813 crore.

“We are on a growth trajectory and with the steps initiated and strategies adopted, there should be further improvement in our performance,” H S Upendra Kamath, chairman and managing director, said.  

Total business rose 24 per cent, backed by 19 per cent growth in advances and 27 per cent growth in deposits, he added. Despite a couple of its crucial accounts becoming non-performing assets (NPAs), the gross NPA and net NPA ratio dropped to 2.8 per cent and 1.7 per cent, respectively, against 3.2 per cent and two per cent, respectively, for the same quarter last year.

The bank has exposure of around Rs 220 crore to Winsome Diamonds, which has defaulted to a consortium of banks and a corporate debt restructuring process for the company is underway. This has resulted in the rise of NPAs at 26 per cent to Rs 1,232 crore, taking the NPA ratio to 2.7 per cent from 2.4 per cent.

Kamath added the capital-to-risk weighted assets ratio, according to Basel-II norms, was 11 per cent and, according to Basel-III, 10.6 per cent. The government of India, the principal shareholder in the bank, had agreed to infuse an additional Rs 250 crore as equity during the ongoing quarter, he said.

The stock price of Vijaya Bank on Monday lost 0.71 per cent to close at Rs 42.15 a share on the NSE.