Poor credit offtake hits Vijaya net profit

Poor credit offtake, drop in net interest income and higher cost of deposits have impacted Vijaya Bank's net profit as it grew only marginally by 2.85 per cent to Rs 105.25 crore for the second quarter ended September 30, 2007, on a y-o-y basis.

Operating profit for the quarter has declined by 9.56 per cent to Rs 144.55 crore compared with the same period last year. Total income has gone up by 44.15 per cent to Rs 1,051.26 crore compared to the same period last financial year. 
 

Rs crore	2006	2007
Interest earned	674.2	964.41
Other income	71.79	86.85
Expenditure	569.41	906.71
Profit before tax	176.58	144.55
Net profit	102.33	105.25
CAR (%)	11.8	11.28
NPR (%)	15.18	10.91
Source: BSE

Announcing the bank's financial results here today, Vijaya Bank Chairman and Managing Director Prakash P Mallya said, "We have witnessed our cost of deposits going up in the second quarter. The credit offtake was below expectations in addition to the drop in net interest income. During the remaining two quarters, we will cover up the losses and achieve a net profit growth of close to 30 per cent in the range of Rs 425-450 crore by end of the financial year."

Net interest income during the quarter dipped by 15.44 per cent to Rs 219 crore compared with the year-ago period.

Vijaya Bank reported a drop in its return on assets (RoA) to 0.92 per cent on an annualised basis in the second quarter compared to 1.21 per cent in the year-ago period.

Its capital adequacy ratio also dropped to 11.28 per cent compared with 11.88 per cent. Earnings per share improved marginally to Rs 2.43 compared with Rs 2.36 in Q2 FY07.

The bank's net non performing assets ratio during the quarter has declined to 0.44 per cent from 0.57 per cent recorded in the corresponding period last year.