The Hindu Business Line : UTI Bank net rises to Rs 109 cr in second quarter

UTI Bank's net profit surged 135.85 per cent for the quarter ended September 30, to touch Rs 109.01 crore as against Rs 46.22 crore in the corresponding quarter last year.

This high growth is illusory, because last year the bank had transferred a large portfolio of government bonds to the held-to-maturity category, said Dr P. J. Nayak, Chairman and Managing Director.

"Compared to the second quarter of 2003-04, our compounded annual growth in the two-year period is 30 per cent. This has been our consistent growth rate for some time now," he said.

The total income in the second quarter of 2005-06 was Rs 865.73 crore (Rs 445.72 crore). Total expenditure was Rs 629.32 crore (Rs 407.33 crore).

Net interest income was Rs 255.45 crore (Rs 180.72 crore). Other income increased to Rs 178.13 crore, up from a loss of Rs 3.59 crore last year. Trading income increased to Rs 68.63 crore against a loss of Rs 94.85 crore last year.

Dr Nayak said, "We have done extremely well in our net interest income. It has increased by 40 per cent, which is perhaps the highest in the industry. We managed this by controlling our cost of funds. We retired a lot of short-term debts and replaced them with long-term debts."

In the first half of 2005-06, UTI Bank's net profit increased 72.5 per cent to touch Rs 201.64 crore (Rs 116.89 crore). Total income rose to Rs 1,637.58 crore (Rs 983.35 crore). On the BSE, the scrip closed at Rs 258.20, up 1.6 per cent from the previous close of Rs 253.95.

Plans 2 subsidiaries

UTI Bank is planning to set up two wholly-owned subsidiaries, said Dr P. J. Nayak, CMD.

One of the subsidiaries will look after the operations of the credit card business, while the other will be an asset management company for launching an infrastructure fund. Both companies will be formed as public limited companies.

About the need for a separate company for credit card operations, Dr Nayak said, "It is a fairly specialised business ." The bank plans to launch its credit card in the fourth quarter.

As per SEBI guidelines, banks cannot undertake fund management on their own. Therefore, UTI Bank is setting up the AMC to manage the funds under the venture capital guidelines, Dr Nayak said.

The bank board approved the appointment of Mr S. B. Mathur as the nominee of the administrator of the specified undertaking of the Unit Trust of India, UTI-I, and also appointed Mr M.V. Subbiah of the Murugappa Group, and Mr Ramesh Ramanathan, former Managing Director, Citibank North America, as independent directors.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Rupee trims losses; bond prices rise

UTI Bank net rises to Rs 109 cr in second quarter

Baja Auto Finance to raise share capital

Crisil reaffirms outstanding ratings on Ranbaxy

BoI to upgrade China office

Citigroup to focus on organic growth — Dedicates financial literacy centre to Indian School of Microfinance for Women

T- Bill auctions

IRDA tariff advisory panel set for major changes

Sivaprakasam, new MD of CARE