By IANS
Bangalore : The state-run Vijaya Bank posted a marginal net profit growth of 2.8 percent for the second quarter (July-Sep) of fiscal 2007-08 over the same period a year ago.
As per the bank’s statement on the financial performance during the quarter under review (Q2), net profit rose to Rs.1.05 billion from Rs.1.02 billion a year ago.
Operating profit declined by Rs.150 million to Rs.1.45 billion from Rs.1.6 billion in the corresponding period a year ago. Similarly, the net interest margin was down by Rs.400 million to Rs.2.2 billion from Rs.2.6 billion a year ago.
“The reason for marginal net income growth and decline in operating profit was due to lower credit off-take, high cost of deposits and setback in net interest margin during the quarter,” Vijaya Bank chairman and managing director Prakash P. Mallya told reporters here Wednesday.
Interest income from advances, however, went up by 43 percent year-on-year (YoY) to Rs.9.6 billion from Rs.6.7 billion.
The bank’s total business increased to Rs.690 billion from Rs.516 billion, with deposits at Rs.421 billion (up from Rs.320 billion) and advances at Rs.268 billion (up from Rs.196 billion).
“In terms of asset quality, our net non-performing assets (NPA) ratio has declined to 0.44 percent from 0.57 percent a year ago. With total cash recovery going up by Rs.191 million to Rs.1.37 billion from Rs.1.17 billion a year ago, net NPA stood at Rs.1.16 billion at the end of the quarter,” Mallya pointed out.
The bank, however, did not declare interim dividend for the first six months (April-Sep) of this fiscal.
“We will announce dividend for the first half (H1) when we finalise results for the third quarter (Oct-Dec) in Jan,” Mallya affirmed.
Giving a brief outlook for the second half (Oct-March) of this fiscal, Mallya said the credit off-take would pick up over the next six months to achieve 24 percent growth on annualised basis.
“We are targeting a total business of Rs.760 billion, with deposits at Rs.450 billion and advances at Rs.310 billion for the entire fiscal. Net profit is poised to double over the next half (H2) to post Rs.4.25-4.5 billion from Rs.2.17 billion achieved in the first half,” Mallya noted.
To comply with the Basel II norms by the next fiscal, the bank plans to raise Rs.3 billion from the capital market to shore up its capital adequacy ratio above 12 percent as against 11.3 percent presently.