The Hindu Business Line : UTI Bank Q1 net rises 30 pc

Driven by higher earnings, UTI Bank reported a 30 per cent rise in its first quarter net profit at Rs 120.55 crore, up from Rs 92.63 crore in the year-ago period.

Dr P.J. Nayak, Chairman and Managing Director, UTI Bank, said the bank could achieve this growth despite higher provisioning and depreciation in valuation of tax-free bonds.

The total income grew by 52.67 per cent to Rs 1,178.42 crore from Rs 771.85 crore.

Net interest income for the quarter increased by 44.66 per cent to Rs 321.84 crore from Rs 222.48 crore. Other income rose to Rs 224.5 crore (Rs 150.01 crore).

Net advances grew by 65 per cent to Rs 25,836 crore from Rs 15,666 crore. Retail advances, which grew by 82 per cent to Rs 7,842 crore, now accounts for 30 per cent of the total advances.

The net interest margin for the quarter was 2.68 per cent (2.66 per cent).

Provisioning increased by 96 per cent to Rs 124.81 crore from Rs 63.54 crore. Valuation of tax-free bonds has depreciated to the extent of Rs 88.37 crore, following amendments to the Income Tax Act.

Average cost of funds increased to 5.45 per cent from 4.93 per cent. Deposits registered a year-on-year growth of 52 per cent to Rs 14,938 crore.

Net NPA was at 0.73 per cent at the end of June, down from 1.19 per cent a year ago.

However, the capital adequacy ratio dropped to 10.28 per cent from 11.74 per cent as on June 30, 2005. Currently, the bank's tier-I CAR is 6.7 per cent against 8.68 per cent a year ago.

Dr Nayak said the bank has sought the RBI's permission to raise capital of Rs 2,400 crore overseas through hybrid instruments and upper tier-II bonds. The bank may also raise capital in the domestic market. The bank has recently opened a branch in Singapore and will be opening a representative office in Shanghai next week.

The bank needs fresh capital as business is expected to grow in the coming quarter, though not at the current pace, he said.

UTI Bank shares ended at Rs 273.1 on the BSE today against its previous close of Rs 276.25.