ING Vysya Bank Q4 net down 18% on retirement provision

Private sector ING Vysya Bank today reported an 18 per cent drop in net profit at Rs 139.1 crore in the March quarter, dragged down by a Rs 61 crore provision for superannuation of some of its employees.
For the full year (FY14), net profit rose 7 per cent to Rs 657.9 crore from Rs 613 crore a year ago.
"We have booked an exceptional expense of Rs 61.1 crore to comply with the IBA circular regarding provision on superannuation, otherwise our net profit would have been higher. It was a one-off hit," ING Vysya Chief Financial Officer Jayant Mehrotra said in a concall.

The exceptional expense pertains to defined schemes for the benefit of a portion of the mid-sized bank's employees on account of pension, gratuity and leave encashment.
"While we had represented to the RBI that given our special circumstances we did not need to comply with this (IBA circular) in full, we have been instructed to nevertheless provide for this in the current year," Mehrotra added.
Net interest income (NII) in the fourth quarter ended March 31 rose 11.2 per cent to Rs 471.3 crore from Rs 423.7 crore a year ago. The Bangalore-based lender's net interest margin stood at 3.74 per cent in Q4 as against 3.73 per cent in the year-ago period.

Gross non-performing assets marginally rose to 1.77 per cent in Q4 from 1.76 per cent, while net NPAs jumped to 0.28 per cent from 0.03 per cent a year ago.

"We expect pressure on asset quality to continue for a few more quarters," Mehrotra said.
The bank did not sell any NPAs to asset reconstruction companies in Q4. Provisions and contingencies increased to Rs 40.6 crore from Rs 33.6 crore in Q4 of FY13.
Current and savings (Casa) deposits grew to Rs 13,759 crore from Rs 13,435 crore at end of March 2013. Casa ratio stood at 33.4 per cent as at March 2014 from 32.5 per cent.

Advances stood at Rs 35,828.85 crore as against Rs 31,772.03 crore last year, while deposits dipped marginally to Rs 41,217 crore from Rs 41,334 crore.
"Total deposit was flat primarily on account of capital infusion and foreign currency borrowings of USD 385 million against concessional forex swap window opened by RBI during the year which resulted in substitution of wholesale deposits to a certain extent," he said.
In FY14, the bank, which has 553 branches and 638 ATMs, raised equity capital of Rs 1,836 crore.