Marginal 2% rise in Vijaya Bank's profit

Hit by the high cost of legacy deposits, Bangalore-based public sector lender Vijaya Bank has reported a marginal two per cent increase in its net profit to Rs 126.73 crore for the third quarter of FY13, compared with the corresponding period in FY12.

Total income in the October-December period grew to Rs 2,357 crore, up 8.4 per cent from last year.

Operating profit declined by 13 per cent to Rs 260.85 crore. The net interest margin at 2.08 per cent was strained, as there was an additional slippage of around Rs 300 crore during the quarter. There was a marginal increase in the capital to risk-weighted assets ratio at 11.78 per cent. Interest income on advances increased by 7.5 per cent and income on investments by 13 per cent. The net interest income was Rs 455.8 crore for the quarter.

Gross non-performing assets (NPA) came down from 3.17 per cent to 2.91 per cent and the net NPA declined from Rs 1,116 crore in September to Rs 1,098 crore in December 2012. In percentage terms, net NPA has come down from 1.9 percent to 1.7 percent.

The capital adequacy ratio stood at 11.78 per cent as against 12.39 per cent during the same period last year.

H S Upendra Kamath, chairman and managing director of Vijaya Bank, said that there would be a visible difference over the next two quarters as they go further on shedding high cost deposits, while parallelly improving Casa (current and savings accounts), yield on advances and maintaining the credit deposits ratio above 72.

Vijaya Bank’s stock lost 3 per cent on the National Stock Exchange to close at Rs 58.25 a share on Thursday.