Vijaya Bank hits fresh 52-week high ahead of Q4 results

Since Feb 2, post Q3 results, the stock surged 75% as compared to 6% rise in Nifty 50 index.

Vijaya Bank hit a fresh 52-week high of Rs 93.40, up 5.5% on the National Stock Exchange (NSE) in intra-day trade even as most public sector banks were trading lower ahead of January-March quarter (Q4FY17) results today.

At 10:29 am; Nifty PSU Bank index, the largest loser among sectoral indices,  was down 1.55% on profit booking. On comparison, the benchmark Nifty 50 index was up 0.06% at 9,320 points.

The board of directors of the bank is scheduled to meet today to consider the audited financial results of the bank, for the quarter and year ended 31st March, 2017 and also to consider recommending dividend, if any, for the financial year 2016-17. The board will also discuss the capital raising plan under BASEL-III for the FY2017-18.

Since February 2, 2017 post October-December quarter (Q3FY17) results, the stock of Vijaya Bank has outperformed the market by surging 75% as compared to 6% rise in the benchmark index.

State-owned bank had reported nearly fourfold jump in its net profit to Rs 230 crore in Q3FY17 despite rise in bad loans on year on year basis. It had posted a net profit of Rs 53 crore in the year-ago period and Rs 154 crore in Q2FY17.

The bank’s gross non-performing assets (GNPA) rose to 6.98% as against 4.32% in the same quarter last fiscal. Net NPA rose to 4.74% in the quarter under review compared from 2.98% a year ago. However, on sequential basis, the bank’s assets quality improved, with gross NPA stood at 7.07% and net NPA at 5.10% in Q2FY17.

“Management expects GNPA ratio to fall to 5.5% and NNPA to 4% by FY18e. On recovery, it expects two-three big account from steel and power segment to resolve in next three-four months and that will drive recovery in FY18e,” Antique Stock Broking said in Q3FY17 result review.

Vijaya Bank is well capitalised (Tier-1 at 9.4%) however plans to further shore up its capital. The bank will look to raise AT-1 capital amounting to Rs 500 crore over next six months which will further strengthen its capital base. The bank's ROA for Q3FY17 was 59bps which it expects to move up to around 65 bps by Mar'17 and to 75 bps in FY18. The bank is also considering announcing dividend during current year, which many PSU banks owing to heavy loses skipped last year, it added.