VIJAYA BANK - RESULTS FOR Q4 FY 2012 - FY 2012 vs FY 2011 vs FY 2010 - Q4 NPT up by 15% - FY 12 down from FY 11, FY 10

Vijaya Bank

NSE Symbol        VIJAYABANK

Vijaya Bank has reported improved Results for the Q4 FY 2012 ending Mar,2012. But, the overall results for FY 12 do not show improvement over preceding 2 years.

QUARTERLY RESULTS REVIEW

Interest on Advances stands at  Rs.1646.88 Cr in Q4 FY 12; compared to Rs.1569.88 Cr in Q3 FY 12 (Up by 4.9%); and compared to Rs.1176.93 Cr in Q4 FY 11 (Up by 39.93%).

Income on Investments  stands at  Rs.491.35 Cr in Q4 FY 12; compared to Rs.476.02 Cr in Q3 FY 12 (Up by 3.22%); and compared to Rs.426.09 Cr in Q4 FY 11 (Up by       15.32%).

Interest Earned stands at  Rs.2152.23 Cr in Q4 FY 12; compared to Rs.2058.26 Cr in Q3 FY 12 (Up by 4.57%); and compared to Rs.1608.78 Cr in Q4 FY 11 (Up by 33.78%).

Other Income stands at  Rs.138.13 Cr in Q4 FY 12; compared to Rs.115.66 Cr in Q3 FY 12 (Up by 19.43%); and compared to Rs.142.88 Cr in Q4 FY 11 (down by -3.32%).

Total Income  stands at  Rs.2290.36 Cr in Q4 FY 12; compared to Rs.2173.92 Cr in Q3 FY 12 (Up by 5.36%); and compared to Rs.1751.66 Cr in Q4 FY 11 (Up by 30.75%).The improvement  in Total Income at 30.75% YoY is quite impressive.

Interest Expended stands at  Rs.1659.68 Cr in Q4 FY 12; compared to Rs.1583.66 Cr in Q3 FY 12 (Up by 4.8%); and compared to Rs.1130.44 Cr in Q4 FY 11 (Up by 46.82%). Interest expended increase at 47% YoY is much higher than the increase in Interest earned at 34%.

Net Interest Income   stands at  Rs.492.55 Cr in Q4 FY 12; compared to Rs.474.60 Cr in Q3 FY 12 (Up by 3.78%); and compared to Rs.478.34 Cr in Q4 FY 11 (Up by 2.97%).  The increase in NII is minimal. With RBI relaxing Interest Rates, the NII is likely to improve in Q1 FY 13 onwards.

Total Expenditure (Excl.provisions) stands at  Rs.2026.88 Cr in Q4 FY 12; compared to Rs.1872.18 Cr in Q3 FY 12 (Up by 8.26%); and compared to Rs.1641.70 Cr in Q4 FY 11 (Up by 23.46%).Compared to Increase in Expenditure at 23.46% YoY, the increase in Income at 30.75% is quite impressive.

Operating Profit stands at  Rs.263.48 Cr in Q4 FY 12; compared to Rs.301.74 Cr in Q3 FY 12 (down by -12.68%); and compared to Rs.109.96 Cr in Q4 FY 11 (Up by 139.61%).The increase  in operating Profit YoY is excellent.

Provisions stands at  Rs.86.83 Cr in Q4 FY 12; compared to Rs.167.24 Cr in Q3 FY 12 (down by      -48.08%); and compared to Rs.85.73 Cr in Q4 FY 11 (Up by 1.28%). Provisions are at same level as last year, but considerably down from previous quarter.

Profit  before tax stands at  Rs.176.65 Cr in Q4 FY 12; compared to Rs.134.50 Cr in Q3 FY 12 (Up by 31.34%); and compared to Rs.24.23 Cr in Q4 FY 11 (Up by 629.05%).

Tax Expense stands at  Rs(-)4.32 Cr in Q4 FY 12; compared to Rs.10.23 Cr in Q3 FY 12 ; and compared to Rs(-)30.00 Cr in Q4 FY 11.

Net Profit  stands at  Rs.180.97 Cr in Q4 FY 12; compared to Rs.124.27 Cr in Q3 FY 12 (Up by 45.63%); and compared to Rs.54.23 Cr in Q4 FY 11 (Up by     233.71%). The improvement in Net Profit YoY is quite impressive.

Face Value is Rs.10; Paid-up Equity is Rs.495.54 Cr.

Capital Adequacy Ratio stands at  10.96%.

Basic EPS stands at  Rs.2.98 compared to Rs.2.63 in Q3 FY 12 and Rs.0.65 in Q4 FY 12.The FY 2012 EPS is Rs.9.49.

Current MP is Rs.57.30; while the 52 week high price is Rs.83.75 and 52 week low price  is Rs.43.80.

On this Basis, the PE Ratio works out to 6.04.If the upward momentum in EPS in Q4 continues further, FY 13 could yield an EPS upwards of Rs.12 which will yield a forward PE of  4.78.

% of Gross/Net NPA stands at  1.72% compared to 1.81% in Q3 FY 12 and Rs.1.52%

Return on Assets stands at  0.78% in Q4 FY 12; compared to 0.55% in Q3 FY 12 and 0.28% in Q4 FY 11.The improvement in return on assets

ANNUAL RESULTS REVIEW

FY 2012 vs 2011 vs 2010

Interest on Advances in FY 12 stands at Rs.6050.09 Cr; compared to Rs.4191.90 Cr (up by 44.33%) in FY 11; and compared to Rs.3838.51 Cr ( up by 57.62%) in FY 10.

Income on Investments  in FY 12 stands at Rs.1872.04 Cr; compared to Rs.1611.01 Cr (up by 16.20%) in FY 11; and compared to Rs.1281.83 Cr ( up by           46.04%) in FY 10.

Interest Earned  in FY 12 stands at Rs.7988.12 Cr; compared to Rs.5844.06 Cr (up by 36.69%) in FY 11; and compared to Rs.5200.65 Cr ( up by      53.6%) in FY 10.

Total Income in FY 12 stands at Rs.8516.02 Cr; compared to Rs.6377.24 Cr (up by 33.54%) in FY 11; and compared to Rs.5880.10  Cr ( up by 44.83%) in FY 10.

Interest Expended in FY 12 stands at Rs.6084.59 Cr; compared to Rs.3897.29 Cr (up by 56.12%) in FY 11; and compared to Rs.3751.57 Cr ( up by 62.19%) in FY 10.

Net Interest Income in FY 12 stands at Rs.1903.53 Cr; compared to Rs.1946.77 Cr (Down by -2.22%) in FY 11; and compared to Rs.1449.08 Cr ( up by 31.36%) in FY 10. While there is marginal reduction in NII compared to previous year of FY 11; there is a significant increase of 31.36% over FY 10.

Total Expenditure in FY 12 stands at Rs.7285.55 Cr; compared to Rs.5330.57 Cr (up by  36.67%) in FY 11; and compared to Rs.4823.14 Cr ( up by 51.05%) in FY 10. Increase in expenditure  is marginally higher than increase in Income.

Operating Profit  in FY 12 stands at Rs.1230.47 Cr; compared to Rs.1046.67 Cr (up by 17.56%) in FY 11; and compared to Rs.1056.96 Cr ( up by      16.42%) in FY 10.

Provisions in FY 12 stands at Rs.581.23 Cr; compared to Rs.362.85 Cr (up by 60.18%) in FY 11; and compared to Rs.355.82 Cr ( up by 63.35%) in FY 10. Provisions have increased considerably over the last 2 years.

Profit before tax in FY 12 stands at Rs.649.24 Cr; compared to Rs.683.82 Cr (down by   -5.06%) in FY 11; and compared to Rs.701.14 Cr ( down by -7.4%) in FY 10. As can be seen from the above, while OPT has increased marginally over the 2 p[receding years, there is a decrease in PBT over these years – due to higher provisions.

Tax Expense in FY 12 stands at Rs.68.25 Cr; compared to Rs.160 Cr (down by      -57.34%) in FY 11; and compared to Rs.193.85 Cr ( down by -64.79%) in FY 10.

Net Profit in FY 12 stands at Rs.580.99 Cr; compared to Rs.523.82 Cr (up by 10.91%) in FY 11; and compared to Rs.507.29 Cr ( up by 14.53%) in FY 10. While PBT was down compared to 2 preceding years, NPT is marginally up , mainly due to less Tax Expense.

Reserves  in FY 12 stands at Rs.3279.15 Cr; compared to Rs.2850.50 Cr (up by 15.04%) in FY 11; and compared to Rs.1884.55 Cr ( up by 74%) in FY 10. There is a Healthy increase in Reserves over the years.

Capital Adequacy Ratio  Stands at 10.96% in FY 12; compared to 12.59% in FY 11; and  11.79% in FY 10. CAR is down but reasonable. Government is periodically enhancing the capital. The same can be expected in current year as well.

Basic EPS in FY 12 stands at Rs.9.49 in FY 12; compared to Rs.9.89 in FY 11; and Rs.11.7 in FY 10. There is a marginal reduction in EPS over the years.

Gross/Net NPA in FY 12 stands at Rs.998.01; compared to Rs.741.16 cr in FY 11 (Up 34.66%); and compared to Rs.581.56 Cr in FY 10 (Up 71.61%). NPAs are increasing over the years.

% of Gross/Net NPA in FY 12 stands at 1.72%; compared to 1.52% in FY 11; and 1.4% in FY 10. In percentage terms also, the increase in NPAs is considerable, though not alarming.

Return on Assets in FY 12 stands at 0.66% in FY 12; 0.72% in FY 11; 0.76% in FY 10.ROA is down over the 2 years.

Public Shareholding in FY 12 stands at 44.98%.

Thus, while Q4 FY 12 performance shows good improvement over previous quarters, the comparison of FY 12 with 2 preceding years is not  commendable. The increase in expenditure needs control and the NPAs need to come down.

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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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