Vijaya Bank's Q4 treasury gains seen hit

Vijaya Bank expects the rise in government bond yields to hit its treasury income in the March quarter, Chairman and Managing Director Albert Tauro said On Wednesday.

“This would hurt. In the current quarter, hardening government bond yields would certainly impact trading profits and profits from sale,” Tauro said.

Bond yields have been rising on concerns over higher supply of papers and no interest rate cut by the Reserve Bank of India (RBI), which was widely expected by a section of money market participants.

On Wednesday, the yield on 10-year bonds surged to 6.66 per cent from nearly 5.29 per cent on January 1.

During October-December, the rise in treasury gains and write-back of mark-to-market provision on investment portfolio had helped Vijaya Bank to report 23.62 per cent growth in earnings.

The bank expects net non-performing assets (NPAs) to rise marginally to 0.60 per cent by March-end, compared with nearly 0.57 per cent a year ago.

The marginal rise in net NPAs would be due to higher incidence of bad assets during October-December, Tauro said.