Vijaya Bank posts Rs 224-cr profit

The bank recorded a 20.2% growth in credit and 16.8% growth in deposits during FY13

Buoyed by stable growth in interest on loans and advances, investment income and other operating income, Vijaya Bank reported a 24 per cent rise in net profit at Rs 224 crore for the fourth quarter ended March 31. The figure was Rs 181 crore in the corresponding quarter of the previous financial year.

The Bangalore-based public sector lender’s total income for the quarter went up 17 per cent to Rs 2,680 crore, compared with Rs 2,290 crore in the year-ago period.

Operating profit for the quarter recorded a robust 47 per cent growth at Rs 388 crore, compared with Rs 263 crore in the year-ago period.

“Increase in interest on loans and advances by eight per cent, increase in investment income by 15 per cent and 100 per cent increase in other operating income have helped the bank in posting decent numbers for the fourth quarter,” said H S Upendra Kamath, chairman and managing director.

The bank recorded a 20.2 per cent growth in credit and 16.8 per cent growth in deposits during FY13. Total business touched Rs 1,65,531 crore.

The net interest income for the March quarter has marginally increased five per cent to Rs 517 crore, compared with Rs 493 crore in the fourth quarter of FY13. The net interest margin, however, dipped 20 basis points to 2.21 per cent for the March quarter, against 2.41 per cent in the year-ago period.

The bank’s cost of deposits remained flat at 7.96 per cent against 7.95 per cent over the same quarter a year ago.

In the last financial year, the bank shed bulk deposits to the tune of Rs 7,000 crore to take it to Rs 21,560 crore. Currently, bulk deposits constitute 22 per cent of the total deposits. The bank plans to reduce it to 15 per cent by the end of March 2014, said Kamath.

According to him, the bank requires Rs 9,200-crore additional capital to meet the Basel-III requirements from 2014-15 onwards.

“We have time till March 2018 to implement Basel-III norms. We have submitted a request to the finance ministry for providing Rs 1,400 crore from the next financial year. We have requested the ministry to give us the capital in two equal instalments of Rs 700 crore so we don’t get crowded out next year,” said Kamath.

Currently, Vijaya Bank has a capital base of Rs 1,695 crore and reserves of Rs 3,863 crore.

As on March 31, the gross non-performing assets (NPAs) of the bank stood at Rs 1,533 crore. The net NPA of the bank is at Rs 910 crore. In percentage terms, the gross and net NPAs levels stood at 2.17 per cent and 1.30 per cent, respectively, in March quarter against 2.93 and 1.72 per cent in the year-ago period.

The return on assets for the March quarter improved to 0.85 per cent from 0.78 per cent in the year-ago period.