The Hindu Business Line : Strong fee-based income lifts UTI Bank Q3 net

BOOSTED by a strong growth in its fee-based income and a significant spurt in retail loans, private sector UTI Bank has clocked a 35.12 per cent growth in net profit for the third quarter ended December 31, 2004. Ithas posted a net profit of Rs 101.15 crore as against Rs 74.86 crore in the previous third quarter.

The bank is back on track in terms of its growth targets this quarter. In the previous quarter, there was a slight shift due to the booking of depreciation on the transfer of SLR securities to the HTM category. This quarter, the 135 per cent growth in fee-based income aided the bank's profits, said Dr P.J. Nayak, Chairman and Managing Director, UTI Bank.

Total income of the bank grew to Rs 634.21 crore (Rs 530.79 crore). This comprised interest earned at Rs 491.25 crore (Rs 393.18 crore) and other income at Rs 142.96 crore (Rs 137.61 crore).

Total expenditure grew to Rs 454.76 crore (Rs 350.08 crore), including interest expended at Rs 304.22 crore (Rs 244.35 crore) and operating expenses at Rs 150.54 crore (Rs 105.73 crore).

Gross NPAs of the bank were down at Rs 377.79 crore (Rs 452.73 crore) while net NPAs were at Rs 216.28 crore (Rs 154.31 crore).

Provisions and contingencies were lower at Rs 31.73 crore (Rs 68.21 crore). Of this, provisions for NPAs were at Rs 2.64 crore (Rs 63.26 crore).

During the quarter ended December, fee income and other income of the bank registered a jump of 135 per cent on a year-on-year basis at Rs 102.08 crore compared to Rs 43.45 crore in the corresponding period, the previous year.

The net interest income was Rs 187.03 crore (Rs 148.83 crore) and the net interest margin (NIM) was lower at 2.9 per cent (3.12 per cent).

The fall in NIM is largely a consequence of a conscious management strategy of rapidly growing the size of the bank, said a press release.

As a result of the aggressive growth in the bank's assets, the capital adequacy ratio has fallen to 9.38 per cent from 10.67 per cent.

The board of UTI Bank has appointed four new directors: Mr R.H. Patil, Ms Rama Bijapurkar, Mr S. Chatterjee and Mr R.B.L. Vaish.

Mr Chatterjee, who is Executive Director, UTI Bank, has been additionally appointed as whole-time director.

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