Vijaya Bank Posts 180% Net Profit Growth In Fourth Quarter
Bank’s other income component grew while asset quality improved.
State-run Vijaya Bank Ltd. posted a 180 percent jump in net profit at Rs 204 crore for quarter-ended March 2017 on the back of improvement in retail operations. The Bengaluru based lender had reported a net profit of Rs 71 crore for the same period last year.
Its net interest margin during the quarter stood at 3.10 percent, up from 2.85 percent in the previous quarter. Profits were also bolstered by a 65 percent year-on-year growth in other income at Rs 450.2 crore.
The margin boost was mainly backed by repricing of deposits, and an over-20-percent growth in the bank’s retail lending book on higher home loan disbursal, said Kishore Sansi, Vijaya Bank’s managing director and chief executive officer.
Net interest income, an indicator of the bank’s core operations, grew 48 percent to Rs 989 crore.
Bank's asset quality saw a slight improvement at 6.59 percent of advances, down from 6.98 percent in the previous quarter. On an absolute basis, however, gross bad loans increased by 1.22 percent sequentially to Rs 6,381.78 crore.
Going forward, Sansi said he expects significant improvement in bad loan resolutions courtesy the recent Reserve Bank of India’s decision to reduce requirement for banks in a joint lenders’ forum to agree to a restructuring plan.
The RBI, in its latest direction, said that only 60 percent of the lenders by value and 50 percent of the lenders by number have to agree to a restructuring plan, for it to be accepted by all lenders in the consortium. Earlier this benchmark was set at 75 percent of lenders by value and 60 percent of lenders by number.
A major portion of Vijaya Bank’s gross non performing assets -- around Rs 4,800 crore -- are from large corporates. These are mostly part of bank consortia, Sansi said.
In the current financial year, the bank aims to continue its focus on growing its retail book, with lending to corporates taking a back seat for at least another two quarters. Sansi said the bank’s loan book is likely to grow at 9-10 percent for FY18, compared to a growth of 6.76 percent in the previous year.
Shares of the midcap bank jumped as much as 10 percent intaday to Rs 97.40 apiece, its highest level since January, 2011.
