Vijaya Bank net down 20.65%; margins rise

Bangalore-based public-sector lender Vijaya Bank has reported a 20.65 per cent decline in its net profit to Rs 124.57 crore for the third quarter-ended on December 31, 2009, compared to Rs 156.99 crore in the corresponding quarter last year. The bank has attributed the dip to low earnings from treasury and provision of Rs 113.17 crore for a non-performing asset.

The bank’s total income too fell 11.47 per cent to Rs 1,447.41 crore. However, it recorded a growth of 45.21 per cent in Net Interest Income (NII) to Rs 454.58 crore aided by a 80 bps reduction in cost of deposits. There was a rise of 6.71 per cent in operating profit to Rs 298.88 crore. Net Interest Margin (NIM) also rose up to 2.80 per cent from 2.38 per cent in the third quarter of the previous year.

“Our numbers need to be seen in the light of the subdued earnings from treasury during the Q3 in the face of hardened benchmark yields. Significantly, our core earnings have made good the moderated treasury earnings as evident from a strong growth in our Net Interest Income,” said Albert Tauro, CMD, Vijaya Bank.

Net NPA for the quarter was 1.3 per cent compared to 0.73 per cent last year. NPA provision coverage ratio was at 65 per cent, which Tauro said was a matter of concern for the bank and was looking to take it to the mandated 70 per cent by March 2010. Capital adequacy ratio for the quarter was 13.34 per cent (Basel- II).

Aggregate business of the bank stood at Rs 98,272 crore where there was a growth of 11 per cent in deposits at Rs 58,928 crore and 8 per cent growth in advances at Rs 39,343 crore. Loans to the MSE sector posted a 13 per cent growth to reach Rs 4,493 crore. Educational loan portfolio of the bank grew 27 per cent YOY to reach Rs 520 crore.

In the STCL account, declared as an NPA, the bank made a provision to the extent of Rs 130.42 crore as on September 30,2009 and the balance had to be provided for in the ensuing two quarters. However, the bank has made the full provision of Rs 113.17 during Q3 itself.