The Hindu Business Line : Vijaya Bank Q1 net profit zooms

Vijaya Bank has reported a net profit of Rs 72.63 crore in the first quarter of the financial year 2006-07, a 164 per cent increase over the corresponding period of the last financial year.

Briefing newspersons on the bank's results after the board meeting, the Vijaya Bank Chairman and Managing Director, Mr Prakash P. Mallya, said, "One quarter is enough for bank turnaround." During the fourth quarter of 2005-06, the bank had declared a loss of Rs 34.53 crore.

Operating profits, however, dropped slightly to Rs 195.11 crore in the first quarter, down from Rs 202.32 crore during the corresponding period of the last financial year. This was mainly on account of a reduction in profits from sale of investments. Incomes from investment trading dropped by Rs 36.91 crore during the period on account of hardening of interest rates in the markets. Mr Mallya said the profits were driven by better earnings from core operations. In fact, net profits from core operations that excluded income from investment trading was Rs 172.69 crore in the first quarter this year (Rs 142.99 crore).

Gross income rose to Rs 700 crore in the first quarter this year, an increase from Rs 657.78 crore during the corresponding period of the last financial year. Interest income also rose to Rs 613.44 crore from Rs 555.58 crore. Interest on advances during the period rose to Rs 380.95 crore up from Rs 314.65 crore. The increased income came from enhanced advances.

Advances rose to Rs 17,916 crore, up 27.71 per cent over the corresponding period of the last financial year.

Some repricing of loans was also made during the period. This was evident from the increased yield on gross credit of 9.02 per cent, up from 8.88 per cent. During the first quarter, the bank also made substantial recoveries of non-performing assets. Mr Mallya said that cash recoveries during the period amounted to Rs 50 crore that contributed to its other income kitty and helped buoy its profits.

In the first quarter, the bank's gross expenditure recorded Rs 504.95 crore, up from Rs 455.46 crore during the corresponding period of the previous year. During the period, the bank's provisions were lower at Rs 110.48 crore, down from Rs 194.35 crore.

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