Vijaya Bank quarterly net profit up 41%

Net interest income grew 33% in December quarter

Public sector lender Vijaya Bank on Friday sprung a surprise by reporting about 40.7 per cent growth in net profit at Rs 52.6 crore for the third quarter ended December 2015, on robust expansion in net interest income (NII) and fee earnings. It had posted a net profit of Rs 37.4 crore in October-December 2014.

Its share price closed 16 per cent higher at Rs 34.3 a share on the BSE. Analysts said the performance of bank was contrary to the widely held view that public sector banks (PSBs) would report bad numbers due to the burden of heavy provisions for impaired assets.

Its NII for the December 2015 quarter grew 33 per cent to Rs 738 crore, from Rs 555 crore for the corresponding quarter in FY15. Net interest margin improved to 2.44 per cent for Q3 of FY16 from 1.88 per cent for Q3 of FY15, the bank stated.

The bank earned fee-based income of Rs 122 crore in this quarter, compared with Rs 93 crore in the year-ago period, indicating a growth of 31.2 per cent.

The bank's gross not performing asset (NPA) ratio, as on December 31, 2015, was 4.3 per cent, up from 2.9 per cent a year ago. The net NPA ratio stood at about three per cent, against 1.9 per cent a year ago.

The provision coverage ratio was about 58 per cent as on December 31, 2015.

The capital adequacy ratio under Basel-III was 10.6 per cent, with Tier-I ratio at 7.8 per cent and Tier-II ratio at 2.8 per cent.