Vijaya Bank Q2 net falls 39.3% to Rs 123.37 cr

Hit by rising non-performing assets (NPAs), higher provisioning, besides decline in its net interest income, Vijaya Bank, on Monday, reported 39.38 per cent fall in its net profit at Rs 123.37 crore for the second quarter of the current financial year ended September 30, 2012.

The bank had reported Rs 203.53 crore net profit in the same period of the previous fiscal year 2012. While the bank’s gross NPA in the reporting quarter was up at Rs 1,896.52 crore as against Rs 1,381.18 crore in the same period of previous fiscal, its net NPA stood at Rs 1,116.45 crore as against Rs 761.15 crore in the same period of previous fiscal. The bank’s gross NPA has risen from 2.54 per cent in the September quarter of last fiscal to 3.17 per cent in the reporting quarter fiscal, while its net NPA also has risen from 1.42 per cent in the last fiscal’s September quarter to 1.90 per cent in the current reporting quarter.

Briefing reporters, Chairman & Managing Director H S Upendra Kamath, said the bank’s profit was also down due to 12.28 per cent dip in the bank’s net interest income at Rs 459.98 crore as against Rs 513.35 crore in the previous fiscal quarter. The bank’s net interest margin also saw a decline at 2.10 per cent (2.72 per cent previous quarter).

The profit, was also impacted by high interest outgo towards bulk desposits and certificate of deposits, Kamath said, adding that the bank was making strenuous efforts to pare down the same. “We have continued to shed them quarter by quarter to improve the bank’s performance.” Likewise, the bank’s provisions and contingencies towards bad loans went up by 11.8 per cent to Rs 106 crore as against Rs 95.6 crore in the same period of previous fiscal, he added.

The bank’s total expenditure during the quarter rose by 18.77 per cent to Rs 2,087.65 crore as against Rs 1,758.65 crore in the year-ago period. While the operating expenses constituted 14.70 per cent of the total expenditure at Rs 320 crore, the interest expenses was 19.54 per cent at Rs 1,768 crore.

The bank’s operating profit, during the quarter, also declined 36.94 per cent to Rs 214.06 crore as against Rs 339.48 crore in the year ago period. Further, the bank’s return on assets also saw a decline of 0.51 per cent in the reporting quarter from 0.95 per cent in the same period of last fiscal.

The bank’s total income during the said period went up by 9.67 per cent to Rs 2,301.72 crore as against Rs 2,098.33 crore reported in the same period last year. During the quarter, the bank had to write off Rs 25 crore (Rs 85 crore previous year’s period) towards bad debt, while upgrading NPAs to the tune of Rs 237 crore (Rs 611 crore previous fiscal). The bank hopes to reach total business of Rs 1,65,000 crore during the current fiscal and continue to monitor its credit portfolio to curtail fresh slippages, while making concerted efforts for recovery and upgradation of its deliquent borrowal accounts. It will also continue its efforts to reduce bulk and certificate of deposits further.

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