On the back of a sharp rise in the other income, UTI Bank has reported a 57.61 per cent rise in the net profit to Rs 25.36 crore for the first-quarter ended June 30, 2001, compared with Rs 16.09 crore in the corresponding quarter of the previous fiscal.
The bank has gone in for heavy provisioning of Rs 41.87 crore (Rs 24 lakh). Other income of the bank rose by 239 per cent to Rs 100.90 crore (Rs 29.75 crore). The major components of the other income were treasury profits and fee-based income.
P J Nayak, chairman and managing director of UTI Bank, said: "We are trying to clean up the balance sheet as we found some backlog in it. So, we have gone in for an accelerated provisioning, apart from the normal Reserve Bank of India provisioning."
Also Read
He said, "In this fiscal we will try to reduce the non-performing assets (NPAs) in our books through write-offs and provisionings depending on the profits." The bank's net NPAs, as on March 31, 2001, were at Rs 181.40 crore.
Meanwhile, the bank is planning to increase the equity-base by making a preferential issue to private equity funds in the next three to four weeks. Nayak said, "The bank is going to make a preferential allotment of the capital which will increase the equity-base by around one-third. Consequently, the UTI's holding in the bank will fall to around 40 per cent." He added that the allotment may be to one or more private equity funds.
The capital adequacy ratio (CAR) of the bank fell to 7.93 per cent. "The bank is growing very fast and in the last three years we have not raised any Tier-I capital. The preferential allotment will take care of the two issues -- the CAR and lowering of the UTI's stake in the bank," Nayak said.
For the quarter, the interest income of the bank rose by 58 per cent to Rs 266.37 crore (Rs 168.82 crore), while the interest expended was up by 56.56 per cent to Rs 238.76 crore (Rs 152.50). While the deposits of the bank grew by 58 per cent to Rs 9,486.46 crore (Rs 5,993.47 crore), the savings deposits shot up by 103 per cent to Rs 644.40 crore (Rs 318.14 crore). The advances of the bank rose by 15 per cent to Rs 4,018.86 crore (Rs 3,508.59 crore).