Vijaya Bank Q1 net profit rises 13% toRs 161.66

Public sector Vijaya Bank today reported a 13.37 per cent increase in net profit to Rs 161.66 crore for the first quarter ended June 30, on account of improved net interest margins.
The city-headquartered bank had reported a net profit of Rs 142.59 crore in the the corresponding period last year.
Total income rose marginally to Rs 3,295.05 crore during the first quarter, as against Rs 3,289.05 crore in the year- ago period.
Commenting on the performance, bank's MD and CEO Kishore Sansi said, "In spite of all the challenges that the banking industry is passing through, we are very happy toannounce that there is a steady growth not only in the business, but also in terms of all fundamental parameters bothin the net interest margin as also in the net interestincome."

"The reason for increased net profit is the net interest margins have increased, there is more reliance on retail, we have shed our bulk deposits, we have increased our fee based income, we have increased our CD ratio -- so all these factors put together have resulted in the increase in the operating profit also," Sansi told reporters here.
Meanwhile, the bank's asset quality worsened, as its gross non-performing assets (NPAs) rose to 7.31 per cent of the gross advances as of June, sharply up from 3.39 per cent ayear ago.

The net NPAs or bad loans stood at 5.42 per cent ofthe net advances at the end of June, almost double from 2.45per cent a year ago.

The bank's provisions (other than tax) and contingencies have risen to Rs 267.82 crore during the quarter, as against Rs 146.38 crore in the year-ago period.
Provision coverage ratio of the bank is at 48.55 per cent as on 30 June.Operating profit for the quarter ended June 2016increased from Rs 392.75 crore to Rs 458.73 crore registering a growth of 16.80 per cent.
Net interest income of the bank increased from Rs 662.23 crore for June 2015 quarter to Rs 782.64 crore for April-June period of 2016, registering a growth of 18.18 per cent.
Sansi said the bank is optimistic on the forthcoming

quarters. "The worst is behind us. Going forward, weare very upbeat about two things; recovery is going to improve, and fresh credit -- both in MSME and corporate -- is going to increase," he said.
Aiming for sustainable growth, the bank wants to improve its net interest margin from 2.54 percent to at least 2.75 per cent in the forthcoming quarters.
"Our intention is also to contain the NPA to the current figure and in case recovery happens, these figures should come down over a period of time," he added.
The bank said its capital to risk weighted assets ratio is at 12.66 per cent (Basel III) with Tier I ratio at 9.49 per cent and Tier II ratio at 3.17 per cent.

Noting that CRAR (Capital to Risk [Weighted] Assets Ratio) of the bank is above the minimum stipulated level of 9 per cent, Sansi said "Capital is not a constraint for growth."
The bank's total number of branches as on June 30, 2016 is1,868, and total number of ATMs at 1,680. Its total staff strength stood at 15,017.