Vijaya Bank Posts Poor December Quarter Results

Bangalore-based PSU lender Vijaya Bank, reported a disappointing set of numbers for Q3FY2014. The bank’s net profit declined by 91.01 % YoY (down 91.64% Q-o-Q) to Rs 11.39 crore, net profit stood at Rs 126.73 crore in the corresponding quarter last year. This is due to higher provisions and operating expenses.

The provisioning & contingencies made during the quarter stood at Rs 159.41 crore, up 55.19% from Rs 102.72 crore in the year-ago period. The total operating expenses for the December quarter grew by 42.99 % at Rs 456.39 crore against 319.18 crore in the corresponding quarter last year. 

The Net Interest Income (NII) grew 8.55% to Rs 494.72 crore in the three-month period ended December 2013 from Rs 455.77 crore a year ago. 

Vijaya Bank’s asset quality improved in the quarter, with the net non-performing assets for the quarter at Rs 1131.07 crore as against Rs 1232.19 crore for Q2FY14, down by 8.21% Q-o-Q. Bank reported a YoY jump of 3.40% in the Gross NPAs, which came in at Rs 1953.06 crore against Rs 1888.87 crore in Q3FY13. On a QoQ basis, the Gross NPAs fell by 1.40%. The ratio of net non-performing assets to net advances stood at 1.57% as on December 31, 2013, lower than that of 1.75% as on September 30, 2013 and 1.71% on December 31, 2012.

We believe that the provision pressures for rising NPA will remain elevated for the next quarter for Vijaya Bank. However, strong efforts to revival by the bank could improve the recoveries which could make some difference to the asset quality. We advise investors to trade cautiously in the counter.