VIJAYA BANK = FY10 RESULTS GOOD = FY11 QUITE PROMISING

VIJAYA BANK

FY10 VS FY 09

RESULTS

COMPARISON

VIJAYA BANK has performed reasonably well in FY10 compared to FY09 and FY08.

There is a reduction in income of all types and total income has therefore come down by 1%.

But, at the same time, interest expended has come down by 8.8%. Employee costs has increased by 18.1%.Other operating expenses by 11.8% and operating expenses by 15.9%. But, share of interest expended in total expenses for almost all banks is much higher compared to all other expenses.

Because of this, operating profit has shot up by 17.6%;Tax expense is lower by 30.5%. Hence, final Net profit has shot up by 93.3% to Rs.507 Cr from last year’s Rs.262 Cr. Return on Assets has increased to 0.76 from last year’s 0.59. Basic EPS has risen to Rs.11.7 from last year’s Rs.6.05.  

Dividend has therefore been hiked to 25% from 10%.

Capital  Adequacy  Ratio has however come down to 11.79 from last year’s 13.08.

% of Gross/Net NPA has also risen  to 1.4 from last year’s 0.82.

The quarterly results indicate that in Q4 while total interest income is down, other income has almost doubled, and total income in Q4 has risen above the Q3 level based on the other income. Q4 total expenditure is lower compared to Q3 and compared to last year – because of lower “interest expended”.

Net profit and EPS is therefore higher than Q3.

As per News dated 15^th June.2010 - Government of India, the major Shareholder of the Bank has subscribed a sum of Rs. 700 Crore (Rs. Seven Hundred Crore Only) in innovative Tier I Capital instruments in the Bank.

As per news dt 29^th,June,2010 – Vijaya Bank has entered into referral arrangements with LIC and United India Insurance for insurance businesses.

A May 24 news said  – that  Vijaya Bank has raised 2.5 billion rupees via Certificates of Deposit. It has raised 4 billion rupees in June- again vie CDs.

 This means – that Vijaya Bank is likely to expand its loan book also considerably in FY11.

Vijaya Bank web site says - VIJAYA BANK commences online trading in association with IDBI CAPITAL MARKET SERVICES LTD.

This seems to be much like ICICI Direct.com

Mr.Albert Tauro, CMD has said on June25th,2010 - our margins, which have been improving all along, will continue to improve in the current quarter also… on the earnings front and on the asset quality front, I feel Vijaya bank is doing quite well…. with the asset growth happening in the coming months, we expect the capital adequacy ratio to be around 13% by March 2011. …. Internally, we have a target of full year NIM (net interest margin) moving up to 2.8% or 2.85% by March ‘11 and gross NPA coming down to less than 2% and net NPA less than 1% by March 2011..

Judging by all these developments – it seems Vijaya Bank is moving fast to become one of the fast growing and profitable Banks. With more funds coming in from government and other sources – its business should expand well in FY11. At current price of Rs.64.65, based on FY10 earnings, the PE ratio is 5.53.Even if the same ratio continues, the improved earnings in FY11 may see price moving up quite well further. In view of the consistent record of PSBs, the PE ratio itself needs to be much higher. They are the most stable performers – through all the times, thick and thin. Market should give them much more credit than at present.

FIGURES FOR

FY10,FY09,FY08

AND

QUARTERLY RESULTS

VIJAYA BANK(In lakhs)	FY10	FY09	FY08	QE  Mar10	QE Dec09	QE sep09	QE jun09	QE Mar09
Interest on Advances	383851	382996	270440	96046	96673	97104	94028	99825
Income on Invest.	128183	131641	118971	22295	36382	35543	33963	33212
Int. on Balan.With RBI	23	419	1658	-	-	4	19	13
Others	8008	8726	7273	3445	1376	1096	2091	3372
Interest Earned	520065	523782	398342	121786	134431	133747	130101	136422
Other Income	67945	69881	43715	29381	10310	12013	16241	25806
Total Income	588010	593663	442057	151167	144741	145760	146342	162228
Interest Expended	375157	411302	305842	92886	88973	97334	95964	104317
Employees cost	70562	59747	40492	16361	17392	16075	20734	16594
Other Oprtg Exp.	36595	32723	29635	10483	8488	8957	8667	9969
Operating Expenses	107157	92470	70127	26844	25880	25032	29401	26563
Total Exp. Excl. prov.	482314	503772	375969	119730	114853	122366	125365	130880
Operating Profit	105696	89891	66088	31437	29888	23394	20977	31348
Provisions	35582	35741	38329	16007	13131	10080	-3636	16419
Profit before tax	70114	54150	27759	15430	16757	13314	24613	14929
Tax Expense	19385	27902	-8369	2338	4300	2472	10275	4704
NPT after tax	50729	26248	36128	13092	12457	10842	14338	10225
Net Profit	50729	26248	36128	13092	12457	10842	14338	10225
Dividend (%)	25	10	20	25	-	-	-	10
Face Value (in Rs.)	10	10	10	10	10	10	10	10
Paid-up Equity	43352	43352	43352	43352	43352	43352	43352	43352
Reserves	188455	167289	167289	2E+05	-	-	-	167289
% of shares OF GOI	53.87	53.87	53.87	53.87	53.87	53.87	53.87	53.87
C A R	11.79	13.08	11.22	11.79	12.01	12.04	12.47	13.08
Basic EPS(Rs.)	11.7	6.05	8.33	3.01	2.87	2.5	3.31	2.36
Gross/Net NPA	58156	29230	18161	58156	51228	54181	57404	29230
% of Gross/Net NPA	1.4	0.82	0.57	1.4	1.3	1.46	1.58	0.82
Return on Assets	0.76	0.59	0.75	0.73	0.77	0.68	0.93	0.68
Public holding (%)	46.13	46.13	46.13	46.13	46.13	46.13	46.13	46.13

ANNOUNCEMENTS TO

THE EXCHANGE

29-06-2010        Vijaya Bank has informed the Exchange that the Bank has signed agreements for Referral Arrangement with Life Insurance Corporation Of India for Life Insurance Business from June 03, 2010 and also Referral Arrangement with United India Insurance co Ltd for General Insurance Business from May 25, 2010.        -

25-06-2010        Vijaya Bank has informed the Exchange that "Vijaya Bank has signed a Memorandum of agreement with Principal Financial Group, Mauritius and Punjab National Bank on 23.06.2010 for restructuring our existing Joint Venture subject to statutory approvals, as under: (1) Continuing in Principal PNB Asset Management Company Ltd. (AMC) and Principal Trustee Company Private Ltd. (TC); (2) Increasing our stake from the existing 19% to 26% in PNB Principal Insurance Broking Private Ltd.; (3) Increasing our stake from the existing 12% to 26% in Principal PNB Life Insurance Company Ltd.; (4) Divesting entire 5% stake in PNB Principal Financial Planners Pvt. Ltd. Punjab National Bank and Vijaya Bank will decide future course of action in the Insurance Companies after approvals and finalization of the deal."

15-06-2010        Vijaya Bank has informed the Exchange that Government of India, the major Shareholder of the Bank has subscribed a sum of Rs. 700 Crore (Rs. Seven Hundred Crore Only) in innovative Tier I Capital instruments in the Bank. Perpetual Non Cumulative Preference Shares (PNCPS) - At an annual Floating Coupon to be benchmarked to Repo Rate with a spread of 100 Basis Points above the Repo rate to be readjusted annually, has been issued to the Government of India. As on date the PNCPS issued to Govt of India amount to Rs.1200/- Crores. The Perpetual Non Cumulative Preference Shares issued to the Government of India are not transferable and are not dealt with in the Stock Exchanges and accordingly cant be traded and/or listed. The said issue is made as per guidelines issued by Reserve Bank of India.      -

31-05-2010        Vijaya Bank has informed the Exchange that the Annual General Meeting of the Bank will be held on July 09, 2010. Further, the Book closure for the purpose of dividend payment and Annual General Meeting is fixed from July 6, 2010 to July 09, 2010 (both days inclusive). -

30-04-2010        Vijaya Bank has informed the Exchange that at the meeting of the Board of Directors of the Bank held on April 30, 2010 recommended a dividend of Rs.2.50 per Share on Bank's Equity Share Capital and at 6% p.a. on Perpetual Non Cumulative Preference Share Capital (PNCPS) of the Bank payable to Government of India for the Financial Year 2009-2010.    -

30-04-2010        Vijaya Bank has informed the Exchange regarding the standalone Results for the quarter ended on 31-MAR-2010 as follows: Interest earned of Rs. 121786 lacs for the quarter ending on 31-MAR-2010 against Rs. 136422 lacs for the quarter ending on 31-MAR-2009. Interest expended of Rs. 92886 lacs for the quarter ending on 31-MAR-2010 against Rs. 104317 lacs for the quarter ending on 31-MAR-2009. Net Profit / (Loss) of Rs. 13092 lacs for the quarter ending on 31-MAR-2010 against Rs. 10225 lacs for the quarter ending on 31-MAR-2009. -

30-04-2010        Vijaya Bank has informed the Exchange regarding the standalone Results for the year ended on 31-MAR-2010 as follows: Interest earned of Rs. 520065 lacs for the year ending on 31-MAR-2010 against Rs. 523782 lacs for the year ending on 31-MAR-2009. Interest expended of Rs. 375157 lacs for the year ending on 31-MAR-2010 against Rs. 411302 lacs for the year ending on 31-MAR-2009. Net Profit / (Loss) of Rs. 50729 lacs for the year ending on 31-MAR-2010 against Rs. 26248 lacs for the year ending on 31-MAR-2009.

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