Vijaya Bank net up 33% in Q2

Vijaya Bank, the Bangalore-based public sector lender, has reported a 33.08 per cent growth in its net profit at Rs 144.30 crore for the second quarter-ended September 30, 2010, over the corresponding quarter last year. The growth in profit was mainly on account of a 33.5 per cent year-on-year increase in net interest income, which went up to Rs 487.2 crore and negligible provisioning during the quarter.

The total income of the bank, however, was marginally up 4.3 per cent to Rs 1,520.9 crore in the second quarter as against Rs 1,457.6 crore in the year ago period.

“The bank’s credit did not grow much as a result of base rate implementation. We lost Rs 5,000 crore worth of deposits in the second quarter. Of this, Rs 4,500 crore was from short-term deposits and Rs 500 crore from bill discounting. Our base rate was not competitive, thereby prompted us not to contract liability and increase our costs,” Albert Tauro, chairman and managing director, Vijaya Bank told reporters.

The bank’s operating profit for the second quarter was Rs 295.85 crore, a growth of 26.46 per cent over the corresponding quarter of last fiscal. “Consistent growth in core earnings has been our forte during the last several quarters. Second quarter of the current year was no different,” he said.

Vijaya Bank improved its net interest margin to 3.16 per cent as against 2.39 per cent in the year ago period as a result of higher yield on advances at 10.20 per cent and and lower cost of deposits at 5.64 per cent.

The provision coverage ratio is 68.75 per cent as on September 30, 2010. The Reserve Bank of India has permitted time upto March 31, 2011 for achieving the prescribed ratio of 70 per cent, Tauro said.

Its capital adequacy ratio during the second quarter improved to 14.25 per cent from 13.44 per cent as per Basel-II. The return on assets also improved to 0.81 per cent from 0.68 per cent in the year ago period. The earnings per share went up to Rs 3.33 from Rs 2.50.

The net non-performing assets of the bank dipped to 1.32 per cent from 1.36 per cent in the year ago period.