A healthy rise in net interest income (NII), revenues from treasury operations when yields on bonds are falling and write-back of provisions made for erosion in value of securities helped seven banks, including Canara Bank and IDBI Bank, to post a robust growth in their net profit for the third quarter ended December 31, 2008.
The seven banks, which announced their results today, showed a rise in NII in the range of 20-135 per cent during the quarter over the year-ago period.
The treasury operations of banks also benefitted from softening of the interest rate as the RBI took a slew of steps, including a substantial cut in the repo rate and the reverse repo rate to boost demand and avert effects of global slowdown.
Canara Bank
Canara Bank, the country’s second largest public sector lender, reported a robust 53 per cent increase in its net profit to Rs 702 crore for the third quarter compared with the corresponding quarter last fiscal. The rise in profit was driven by a 33 per cent rise in net interest income to Rs 1,244 crore over same period last year. Its total income for the quarter went up by 31.4 per cent to Rs 5,383 crore. Its net interest margin (NIM) increased by 33 basis points to 2.75 per cent as at December 2008.
The bank has made higher provisions amounting to Rs 513 crore, which includes Rs 357 crore towards non-performing assets (NPAs). For the first time, the bank declared its exposure towards Ratnagiri Gas project amounting to Rs 400 crore as NPA.
Union Bank of India
Mumbai-based public sector bank Union Bank of India today reported an 84.03 per cent rise in its third quarter net profit to Rs 671.74 crore compared with Rs 365.02 crore in the corresponding period a year ago. The bank attributed the higher profit to the reverse provisioning, which were made when the yield from the securities were high on account of rising interest rates. The bank’s net interest income rose 50 per cent to Rs 1,128 crore from Rs 752 crore.
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IDBI Bank
Its net profit rose by 27 per cent to Rs 223 crore for third quarter as against Rs 176 crore in the same period year ago. Besides the rise in NII, fee-based income also contributed to the bottom line, by showing a 103 per cent growth to Rs 237 crore as against Rs 117 crore, its chief financial officer R K Bansal said.
Meanwhile, the bank deferred the decision on selling its home loan company, IDBI Home Finance, as the board had sought additional information on the proposal.
Syndicate Bank
Syndicate Bank posted a 30.5 per cent growth in net profit to Rs 356 crore thanks to the write-back from earlier provisions of about Rs 159 crore. The rise in net profit was also helped by the drop in g-sec yields to 5.3 per cent from 8.6 per cent. Its net interest margin increased to 2.83 per cent. The net interest income for the quarter increased 66.5 per cent to Rs 789 crore on higher advances as the bank controlled its non-performing assets.
ING Vysya Bank
Bangalore-based private sector lender ING Vysya Bank reported a 21.7 per cent rise in its net profit to Rs 52.05 crore in Q3 boosted by a 19 per cent increase in its net interest income, which stood at Rs 172.7 crore.
Karnataka Bank
Mangalore-based private sector lender Karnataka Bank today reported a 29 per cent jump in its net profit to Rs 89 crore for the third quarter compared to the corresponding quarter last financial year. The bank’s total income for the quarter stood at Rs 607.1 crore, a growth of 26.6 per cent, compared to the same period last year.
Vijaya Bank
Vijaya Bank has reported a 23 per cent increase in net profit to Rs 157 crore for the third quarter ended December 31, 2008, as against Rs 127 crore for the corresponding quarter of last year. Total income has moved up by 43 per cent to Rs 1,635 crore. Interest income has moved up by 37 per cent to Rs 1376 crore.