Financial Daily from THE HINDU group of publications
Friday, Oct 15, 2004
Money & Banking - Financial Performance
UTI Bank Q2 net down 28 pc
Mumbai , Oct. 14
UTI Bank Ltd's net profit for the second quarter of the current fiscal showed a decline of 28 per cent at Rs 46.22 crore as compared with Rs 64.18 crore for the corresponding period in the previous year.
This dip in the net profit could be attributed to a negative Rs 3.59 crore `other income' figure; in the corresponding period last fiscal the `other income' was at Rs 149.82 crore.
"Trading income, which forms part of other income, had a hit of Rs 114 crore. Government securities were transferred from Available for Sale (AFS) category to Held to Maturity (HTM) category which was a reason for this loss in trading profit," said Dr P.J. Nayak, Chairman and Managing Director, UTI Bank.
He added that if the transfer was not done on September 13, 2004, the profits might have taken a further hit of about Rs 20 crore -30 crore. The prices fell even more sharply after that period.
For the July to September quarter this fiscal, total income was Rs 445.72 crore (Rs 543.79 crore).
Total interest earned increased by 14.04 per cent to Rs 449.31 crore (Rs 393.97 crore). Net interest income grew by 31 per cent to Rs 180.72 crore on account of lower cost of funds, higher share of demand deposits along with growth in assets.
The advances of the bank grew to Rs 10,498 crore from Rs 7,430 crore, higher by 41 per cent.
Total expenditure (Excluding provisions and contingencies) also rose a little over 12 per cent to Rs 403.33 crore compared with Rs 362.78 crore in the previous second quarter.
Net non-performing assets (NPAs) declined to 1.33 per cent from 1.97 per cent in the second quarter for the previous fiscal.
The capital adequacy ratio of the bank also declined to 10.67 per cent from the previous corresponding figure of 11.24 per cent. This fall has been attributed to lower net profit for the quarter coupled with `aggressive' growth in bank's assets.
The net profit for the half-year ended September 30 showed a marginal rise of Rs 116.89 crore as compared to the corresponding figure in the previous fiscal, which was at Rs 116.36 crore. Total income for the first half period was Rs 983.35 crore (Rs 1,091.67 crore).
According to Dr Nayak, net interest income and fee income will be the drivers of growth for the coming quarters of the current fiscal. He said fee income is expected to grow faster.
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