Money & Banking

Employee costs weigh down Vijaya Bank profits in Q4

| | Updated on: Apr 28, 2011




Net declines 58.5% to Rs 54.23 crore

With employee costs more than doubling during the fourth quarter of the last fiscal, Vijaya Bank's net profits were down 58.5 per cent to Rs 54.23 crore, compared with Rs 130.92 crore recorded during the corresponding quarter of the 2009-10 fiscal.

Employee costs of the bank were at Rs 387.08 crore (Rs 163.61 crore), mainly due to provisioning for second pension option and enhancement in gratuity limits for public sector banks. The bank provided about Rs 150 crore as one-time provision towards the same in respect of retired employees, Mr H.S. Upendra Kamath, Chairman and Managing Director, Vijaya Bank, said while announcing the results here.

While the bank's net interest income was up 23 per cent to Rs 478.35 crore (Rs 388.69 crore), its other income had come down by over 51 per cent, “because of decline trading profit from domestic treasury”, he explained. Treasury income for the quarter was at Rs 28 crore (Rs 64 crore).

As the bank has moved to a fully system-driven NPA identification regime, the gross NPAs for the quarter were up 2.56 per cent (2.37 per cent) and net NPAs stood at 1.52 per cent (1.4 per cent). “With the system-driven NPA identification being implemented fully, there is nothing now which is left undetected. So this fiscal, we would be in a position to focus entirely on recoveries. This year will witness robust recoveries,” said Mr Kamath.

On the other hand, provisions during the quarter were at Rs 85.73 crore (Rs 160 crore); the reduction in provisioning was aided by a reversal of excess provisioning for tax of Rs 100 crore, he pointed out.

For the 2010-11 fiscal

Vijaya Bank's net profit for the 2010-11 fiscal went up 3.26 per cent to Rs 523.82 crore, compared with Rs 507.29 crore recorded during 2009-10, “despite additional employee provisioning of Rs 312 crore”, said Mr Kamath, adding, “if the one-time expense of Rs 181 crore towards provisioning for retirees were to be added back notionally, our actual profits would have grown over 30 per cent at Rs 705 crore”. The net interest income was up 34.35 per cent to Rs 1,946.78 crore (Rs 1,449.07 crore).

Published on April 28, 2011

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