Bangalore: Public sector lender Vijaya Bank Monday reported 19 percent rise in net profit at Rs 132.46 crore in the first quarter of the current fiscal on lower provisioning and rise in net interest income.
The Bangalore-based bank had posted a net profit of Rs 111.36 crore during the corresponding period last year.
Total income of the bank for the quarter under review was up by 16.3 percent to Rs 2,699 crore, against Rs 2,320 crore in the same period last year.
The bank's operating profit has gone up by 28 percent to Rs 330.39 crore as against Rs 258.87 crore last year.
Stating that rise in net profit was on account of lower provisioning and rise in net interest income, Vijaya Bank CMD H S U Kamath said, "Increased treasury profits and continuous vigil on credit portfolio has enabled the bank to post decent numbers."
The bank said it has made a provisioning of Rs 89 crore in the first quarter against Rs 130 crore in the year ago period. Its net interest income rose 5.67 percent to Rs 480.84 crore in FY14 from Rs 455.05 crore in FY13.
Stating that capital to risk weighted assets ratio under Basel II is at 10.90 percent, Kamath said, "The ratio as per Basel III is at 10.56 percent. Both the ratios are above the minimum required levels stipulated by RBI."
The bank's agricultural loans increased to Rs 6,395 crore, a gain of 24 percent while loans to MSME (priority) sector reached Rs 10,530 crore registering a growth of 21 percent.
Its educational loan portfolio was up 4.69 percent to Rs 669 crore.
Net non-performing assets ratio of the bank dipped by 1.45 percent in the quarter under review as against a 1.67 percent drop in the same quarter of last fiscal.
Commenting on the credit growth, he said, "There is no new proposal for new credit coming, investment climate is not very strong, there are no plans for CAPEX happening in the industrial or corporate sector. That is why growth in this sector is low. Frankly speaking I don't see credit growth picking up in the coming quarter.
"The corporate sector is not growing other than what is already in pipeline; what can grow actually is retail, MSME, agriculture."
Answering a question relating to RBI's policy, Kamath said, "In my view there is no elbow for RBI to reduce interest rate, I also don't see it going up."
The bank aims to reach a business level of Rs 2,10,000 crore with a deposit target of Rs 1,22,000 crore and advance target of Rs 88,000 crore by March 2014. It also aims at opening new branches to take the total number of branches to 1,500 and roll out new ATMs to reach branch and ATM ratio of 1:1.
First Published: Monday, July 29, 2013, 22:53