VIJAYA BANK - QTRLY RESULTS - Q3 FY 2012 - Q/E DEC,2011 - NPT DOWN 18% YoY. HIGHER NPAs IN Q3 - BANK CONFIDENT FOR FUTURE.

Vijaya Bank

NSE Symbol        VIJAYABANK

Vijaya Bank has declared results for 3^rd Quarter ending  Dec,2011.

Interest on Advances  stands at Rs.1569.88 cr – up by  4.48% from Q2 FY 12, the previous qtr and  up by 51.41% from Q3 FY 11.

Income on Investment stands at  Rs.476.02 cr – up by  3.86% from Q2 FY 12 and up by  11.14% from Q3 FY 11.

Interest Earned stands at Rs.2058.26 Cr – up by  3.29% from Q2 FY 12 and up by         38.84% from Q3 FY 11.

Other Income stands at Rs.115.66 Cr – up by 9.45% from Q2 FY 12; and up by  13.51% from Q3 FY 11.

Total Income stands at Rs.2173.92 cr – up by  3.6% from Q2 FY 12; and up by 37.21% from Q3 FY 11.

Interest Expended stands at Rs.1583.66 cr – up by  7.05% from Q2 FY 12; and up by 67.37% from Q3 FY 11.

NET INTT INCOME stands at Rs.474.60 cr – down by  -7.55% from Q2 FY 12 and  down by  -11.51% from Q3 FY 11.  While total Income has gone up reasonably well, Net Interest Income has not gone up either in previous Qtr or in corresponding qtr, but has registered a downfall. This is attributed to interest expenses going up steeply in the quarter and also reversals of some interest receivables following restructuring of two major accounts that had turned into NPAs..

Total Expdr (excl.prov.)stands at Rs.1872.18 cr – up by 6.46% from Q2 FY 12; and up by  48.85% from Q3 FY 11.

Operating Profit  stands at Rs.301.74 Cr – down by  -11.2% from Q2 FY 12; and down by  -7.61% from Q3 FY 11.

Provisions  stands at Rs.167.24 cr – up by a huge 74.44% from Q2 FY 12; and up by  45.68% from Q3 FY 11.

Profit before tax has also come down to Rs.134.50 cr – down by  -44.9% from Q2 FY 12; and down by  -36.5% from Q3 FY 11.

Net Profit, after tax stands at Rs.124.27 cr – down by  -38.9^ from Q2 FY 12; and down by -18.14% from Q3 FY 11.

Capital Adequacy Ratio stands reasonably at 10.94 though down from 11.27 of Q2 FY 12; and  12.85 of Q3 FY 11.

% of Gross/Net NPA has increased to  1.81% in  Q3 Fy 12 against 1.42% in Q2 FY 12; and  1.38% in Q3 FY 11.

Return on Assets has fallen to 0.55 from  0.95 In Q2 FY 12 and  0.86 in Q3 FY 11.

Basic EPS stands at Rs.2.63 in Q3 FY 11; Rs.4.31 in Q2 FY 12 and  Rs.1.53 in Q3 FY 11.   The annual EPS on this Basis will come to about Rs.11.1

Current Market Price stands at Rs.55.70. while the 52 week high price is Rs.95.35 and the 52 week low price  is Rs.43.80.

The PE Ratio stands at 5.02.

Vijaya Bank Chairman has said –

"The total business of the bank reached an all-time high of Rs 1,37,594 cr during the period under review, comprising deposits of Rs 81,756 cr and advances of Rs 55,838 cr, a 21.15 per cent growth over the previous period

“The bank aims to reach a business level of Rs 1,44,000 cr in the fourth quarter, with a deposit target of Rs 85,000 cr and an advances target of Rs 59,000 cr. 

"Focus will be on improving the NIM by mobilising more CASA and retail deposits to reduce costs and increasing retail and mid-corporate advances for improving yields. 

“yield on advances rose to 11.62 % during the first nine months of FY'12 from 10.13 % in the corresponding period of the previous year. The total interest income on advances during the period under review stood at Rs 4,403 cr. as against Rs 3,015 cr. during the first nine months last fiscal.”

From what the CMD said above – especially regarding improving NIMs in 4^th Quarter, we get the feeler that the drop in NET PROFITS  is one time occurrence – and will not recur in coming quarters.

He said the bank stood to gain Rs 390 cr from RBI's move to reduce the CRR by 50 basis points, which will infuse Rs 32,000 cr into the credit market.

What do the Banks in general feel about the future – especially after the CRR Cut by the RBI?

The CMD, Vijaya Bank says - "This is a positive indication as the RBI wants to say that the market revival has started. Overall liquidity will go up and this will help banks to reduce their interest costs."

This is true. All Banks can be expected to perform well in the 4^th Quarter as the CRR cut boosts their funds Position. There may be further indication by RBI in future about interest Rate reduction as well – which will improve the Credit environment significantly. This will further improve the profitability of most of the Banks.

RESULTS TABLE

VIJAYA BANK	31-Dec-11	30-Sep-11	%dif1	30-Jun-11	31-Mar-11	31-Dec-10	%dif2
Interest on Advances	156988	150255	4.48	133078	117693	103687	51.41
Income on Investments	47602	45833	3.86	44633	42609	42831	11.14
Income on Balances With RBI	32	2	1500	18	61	54	-40.74
Others	1204	3176	-62.1	767	515	1679	-28.29
Interest Earned	205826	199266	3.29	178496	160878	148251	38.84
Other Income	11566	10567	9.45	16844	14288	10189	13.51
Total Income	217392	209833	3.6	195340	175166	158440	37.21
Interest Expended	158366	147931	7.05	136194	113044	94619	67.37
NET INTT INCOME	47460	51335	-7.55	42302	47834	53632	-11.51
Employees Cost	17045	16517	3.2	16948	38708	20820	-18.13
Other Oprtng Expenses	11807	11411	3.47	9647	12418	10341	14.18
Oprting Expenses	28852	27928	3.31	26595	51126	31161	-7.41
Total Expdr.excl.prov.	187218	175859	6.46	162789	164170	125780	48.85
Operating Profit	30174	33974	-11.2	32551	10996	32660	-7.61
Provisions	16724	9587	74.44	23129	8573	11480	45.68
Profit before tax	13450	24387	-44.9	9422	2423	21180	-36.5
Tax Expense	1023	4034	-74.6	2200	-3000	6000	-82.95
Net Profit	12427	20353	-38.9	7222	5423	15180	-18.14
Face Value (Rs.)	10	10	0	10	10	10	0
Paid-up Equity	47267	47267	0	47267	47267	43352	9.03
Capital Adequacy Ratio	10.94	11.27	-2.93	12.27	12.59	12.85	-14.86
Basic EPS	2.63	4.31	-39	1.53	0.65	3.09	-14.89
Gross/Net NPA	99710	76115	31	83269	74116	59854	66.59
% of Gross/Net NPA	1.81	1.42	27.46	1.65	1.52	1.38	31.16
Return on Assets	0.55	0.95	-42.1	0.34	0.28	0.86	-36.05
Public holding (%)	42.31	42.31	0	42.31	42.3	46.13	-8.28

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