The Hindu Business Line : Lakshmi Vilas Bank full year profit rises 44%

Coimbatore, May 28 Despite clocking an increase of 44 per cent in its net profit to Rs 25.27 crore in 2007-08 from Rs 17.58 crore in the previous year, the Lakshmi Vilas Bank CEO and Managing Director, Mr V.S. Reddy, feels that the bank’s performance could have been better. He has plans to improve the momentum in 2008-09 by setting a business target of Rs 15,125 crore against Rs 9,477 crore achieved in the just-ended fiscal.

“Our entire network has come under the CBS platform and we have rolled out technology-oriented cost-effective products and services. We have tied-up with ‘Cash Tree’, a consortium network of 13 banks, which allows our customers to access 4,500 ATMs across the country. We will be launching Internet and mobile-banking services soon,” he explained.

To achieve the target and meet future business requirement, LVB plans to raise capital. While confirming this, Mr Reddy declined further comment. He said “The board is meeting on June 11 and 12. Nothing has been firmed up yet.”

He emphasised the need for training its people to achieve this goal. “We have tied up with larger banks to train our people,” he said. “Cost is not a constraint. We want at least 300 managers to undergo this training and gain expertise not just in bank-related products but in communication skills as well,” he added.

Headcount

LVB, meanwhile, is also ramping up its headcount. Against the intended 700, the bank has recruited 400 candidates from B-schools and arts and science colleges across the country. Mr Reddy added that the bank would look to hire 300 more freshers in the next two to three months.

The Karur-headquartered bank plans to expand its network by opening 12 branches (simultaneously) on Friday (May 30).

Rise in NPA

On the increase in the net NPA level to Rs 59.52 crore in 2007-08 against Rs 56.94 crore in the previous fiscal, he said a big-ticket advance turned bad. “Some adjustments made during the earlier year had to be reviewed. There were no major casualties last year,” he added.

The bank has reported a rise of about Rs 25 crore in other incomes to Rs 82 crore in 2007-08. Mr Reddy explained that it was partly from the sale of a non-banking asset.

It may be recalled that LVB had invited offers for sale of 12 residential plots in Chennai in February. Bank sources then maintained that the response was good. Mr Reddy said, “We still have some land left. We will consider selling at least some part of it this year.” The board has recommended a dividend of 15 per cent for the 2007-08 fiscal.

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