Vijaya Bank net profit up 22 percent

State-run Vijaya Bank Monday reported Rs.152 crore net profit for the third quarter (Oct-Dec) of this fiscal (2010-11), registering 22 percent year-on-year (YoY) growth.

“Continuing our growth trend, our core earnings showed improvement once again as net interest income grew 37 percent YoY and net interest margin to 3.44 percent from 2.65 percent year ago,” Vijaya Bank chairman and managing director Albert Tauro told reporters here.

The bank clocked up an operating profit of Rs.327 crore, an increase of 9.3 percent YoY.

The positive growth in net profit was arrived at after making provision of Rs.95 crore for second pension option for the bank’s employees, Rs.98 crore for non-performing assets and Rs.60 crore towards tax.

“Capital to risk weighted assets is comfortable at 13.7 percent under Basel II norms, with tier-1 ratio at 9.3 percent and tier-2 ratio at 4.42 percent,” Tauro said.

The listed bank’s aggregate business for the three quarters (April-Dec) of this fiscal climbed to Rs.107,272 crore, comprising Rs.63,702 crore deposits and Rs.43,570 crore advances.

“We have set a target of Rs.120,000 crore business for the fiscal, comprising Rs.70,000 crore deposits and Rs.50,000 crore advances, projecting 16 percent YoY growth, 35 percent growth in net interest income and 3.25 percent net interest margin,” Tauro asserted.

The other income, however declined to Rs.102 crore from Rs.165 crore year ago due to adverse market conditions and lower returns from treasury operations, Tauro admitted.

He also hinted at the hardening of interest rates after the Reserve Bank of India (RBI)’s monetary policy Tuesday in Mumbai.

“The bias towards higher interest rates is due to inflationary pressure and robust growth of the economy, with demand out-pacing supply,” Tauro added