UTI Bank net up 40% on fee income surge

UTI Bank today said its net profit in the fourth quarter ended March 2007 rose 40 per cent with the rapid growth in corporate advances and fee income offsetting the increase in interest rates.

The mid-sized bank's net profit in the January-March quarter increased to Rs 211.89 crore from Rs 151.73 crore a year earlier with net interest income rising 48 per cent to Rs 464.23 crore from Rs 312.86 crore a year ago.

For the year ended March 2007, the bank has registered 35.86 per cent growth in net profit at Rs 659.03 crore compared with Rs 485.08 crore a year earlier. The bank's board recommended a dividend of 45 per cent.

"Our focus has been on mobilisation of demand deposit and this has enabled the bank to reduce its costs. The net interest margin (NIM) has improved as we have passed on the increase in costs to the consumer. The robust growth in fee income has driven our profits,'' said Asok Kumar, executive director, UTI Bank.

The net interest margin (NIM) for the fourth quarter was 3.06 per cent compared with 2.96 per cent a year ago despite the average cost of funds rising to 5.92 per cent at the end of the fourth quarter from 5.53 per cent in the preceding quarter and 5.08 a year earlier. The bank's fee income grew 59 per cent to Rs 257.94 crore over the fourth quarter from Rs 162.38 crore a year earlier.

While total deposits expanded 46 per cent year-on-year to Rs 58,785.60 crore as on March-end, the net advances grew by 65 per cent to Rs 36,876 crore. Corporate advances at Rs 23,874 crore and retail advances at Rs 8,928 crore grew 72 per cent and 38 per cent, respectively.

Net non-performing assets (NPAs) as a proportion of the net customer assets portfolio stood at 0.61 per cent compared with 0.75 per cent last year. Provisions for bad loans fell to Rs 8.29 from Rs 21.36 crore a year earlier.

The bank's capital adequacy ratio rose to 11.57 per cent from 11.08 per cent a year earlier.