Vijaya Bank Net Profit Jumps Over 57% Despite Rise In Bad Loans

Vijaya Bank Ltd. reported an over 57 percent jump in net profit in the first quarter even as its provisions for bad loans escalated mainly due to exposure to Videocon Industries Ltd.

The public sector bank’s total exposure to Videocon during the reported quarter stood at Rs 680 crore, which contributed significantly to the increase in the net non-performing assets (NPAs) to 5.24 percent from 4.36 percent, Managing Director and Chief Executive Officer Kishore Sansi told BloombergQuint in Bengaluru on Saturday at the post-earnings press conference.

The lender’s net profit rose to Rs 255.4 crore from Rs 161.6 crore in the year-ago period, according to an exchange filing.

Gross non-performing assets, in absolute terms jumped 6.8 percent to Rs 6,812 crore on a quarterly basis. These account for nearly 7.30 percent of the bank’s total assets, as stated in the quarterly earnings report.

The bank’s provisions for bad loans surged 19.1 percent to Rs 411 crore sequentially. At the same time last year, the figure stood at Rs 253 crore, less than half of what it is now.

Net interest income, or the core income of the bank, rose by 20.6 percent to Rs 944 crore, on a yearly basis. The bank’s capital adequacy ratio remained constant at 12.7 percent.

Meanwhile, the shareholders of the bank have given approval to raise Rs 1,000 crore of equity during the annual general meeting held on June 23, the bank said in an exchange filing. The route to be taken for this will be decided by the Board later.

Exposure To RBI’s Chosen 12

Vijaya Bank had an exposure of Rs 1765.85 crore to the 12 large stressed accounts referred for resolution under the Insolvency and Bankruptcy Code. This includes an exposure to seven loan accounts and one non convertible debenture issue.