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Vijaya Bank saw its net profit decline 20 per cent to ₹115 crore in the second quarter ended September 2015 on higher provisioning. The Bengaluru-headquartered public sector bank had reported a net of ₹143 crore in same quarter last year.
Net interest income, the difference between interest earned and expended, grew 20 per cent to ₹692.55 crore from ₹578.70 crore. Vijaya Bank reported a 30 per cent rise in operating profit at ₹399 crore. “Net profit was impacted by the increase in provisions,” said Kishore Sansi, Managing Director and CEO, Vijaya Bank. The provision-coverage ratio stood at 58.28 per cent.
The bank made a total provision of ₹283 crore, 74 per cent more than the corresponding last quarter’s ₹163 crore. Of the total provisions, ₹272 crore was towards non-performing assets (NPAs), which rose sharply during the quarter. Gross NPAs were up at ₹3,459.90 crore (₹2,239 crore in the corresponding quarter last year). Net NPAs also rose sharply to ₹2,441.88 crore (₹1,461.95 crore).
Gross NPAs as a percentage of advances increased to 3.98 per cent (2.85 per cent), while net NPAs rose to 2.84 per cent (1.88 per cent).
“Net slippages during the quarter were to the tune of ₹600 crore, mostly in the areas of infrastructure and large corporates,” Sansi said.
Vijaya Bank shares ended 1.59 per cent lower at ₹34 on the BSE on Friday.
Debt recast Responding to a query on the debt recast package approved by the government for ailing power distribution utilities, Sansi said it would have a positive impact and was good not only for the banking and power sectors, but also for the States and consumers.
Vijaya Bank has a total exposure of ₹7,900 crore to discoms and most of these are stressed. “If this package had not come by next quarter, we would have seen a lot of stress,” he added.
Capital infusion Further, Sansi said the bank has requested the government to infuse ₹400 crore capital. “We have plans to go for Tier-I bonds for ₹200 crore and Tier-II bonds for ₹200 crore in the coming quarters,” he added.
Vijaya Bank expects credit growth to pick up in the coming quarters. While the bank faced flattish credit growth in the first half of the current fiscal, it expects demand to pick up. “We expect 14-15 per cent growth in credit demand during the current financial year,” he added.
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