The Hindu Business Line : Vijaya Bank redeems Rs 2,000-cr bulk deposits

‘Strong growth’: Mr Prakash P Mallya (left), Chairman and Managing Director, Vijaya Bank, and Mr T. Valliappan, Executive Director, at a press conference in Bangalore on Tuesday. –

Our Bureau

Bangalore, Jan 22 Vijaya Bank redeemed Rs 2,000 crore of bulk deposits in the third quarter (Q3) of this financial year (2007-08). The Chairman and Managing Director, Mr Prakash Mallya, said: “Another Rs 6,000 crore of bulk deposits will mature in March this year. We have the option of redeeming them or look for repricing the funds. The interest payout on the bulk deposits ranged between 9 per cent and 11 per cent. However, Mr Mallya said the bank would not pay those rates for the deposits coming up for renewal. “We will not pay more than the current card rates.”

Net profit

The bank has taken this step in a bid to curb the rising costs of working funds, he said. The bank reported a net profit of Rs 126.88 crore in Q3, a 37-per cent increase over the corresponding of last year, when it was Rs 92.73 crore. During the same period, the gross profit rose to Rs 181.13 crore up from Rs 118.69 crore.

Mr Mallya said that the increase was mainly on account of the improved interest income and treasury profits. Gross income rose to Rs1,139.19 crore up from Rs 784.86 crore during the corresponding period of last year. Interest Income for the period was Rs 1,022.51 crore, up from Rs 731.87 crore. Other income during the period rose to Rs 116.68 crore, up from Rs 52.99 crore. The increase was largely on account of treasury profits of Rs 70 crore. In addition, the bank the also made a cash recovery of Rs 203 crore that contributed to its bottom line, Mr Mallya said.

Vijaya Bank’s yield on advances also showed a 61-basis point increase over the corresponding period of last year. Yield on advances in Q3 was 10.41 per cent, up from 9.8 per cent. Along with this, the bank was able to record a 35.46-per cent increase in advances. Outstanding advances in Q3 were Rs 28,080 crore.

During the period, Vijaya Bank’s gross expenditure rose to Rs 980.56 crore, up from Rs 632.60 crore.

Interest expenditure was at Rs 803.42 crore, up from Rs 466.89 crore.

Mr Mallya said that the increase was partly on account of the large bulk deposits, the bank had taken in March 07.

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