UTI Bank Q3 net profit up 30%

UTI Bank's quarterly net profit jumped a modest 30.21 per cent to Rs 131.71 crore for the period ended December 31, 2005, as against Rs 101.15 crore in the corresponding quarter of last fiscal.

For the third quarter, total income increased by 45.08 per cent to Rs 920.12 crore from the Rs 634.21 crore reported for Q3 last fiscal year. But total expenditure too rose by a whopping 45.99 per cent to Rs 663.92 crore, from the Rs 454.76 crore reported in third quarter last financial year.

"Total expenditure was higher this quarter because we added more branches this quarter. However our cost-to-income ratio has fallen by 90 basis points, which implies that the bank's income is higher than what it the spent," said P J Nayak, chairman and managing director, UTI Bank.

Net income from interest for the third quarter was Rs 287.44 crore, as compared with Rs 187.03 crore earned in Q3 last year, reflecting a healthy 54 per cent gain. The net interest margin (NIM) grew to 2.94 per cent, as compared with 2.90 per cent in the comparable quarter of the preceding year.

Rise in NIM coupled with the year-on-year growth in net advances of 49 per cent have contributed to the rise in net interest income, said Nayak. The net non-performing assets (NPAs) have fallen to 0.95 per cent from 1.30 per cent at the end of the October-December quarter of the preceding year.

As a result of the aggressive growth in the bank's assets, the capital adequacy ratio (CAR) of the bank, however, fell to 11.58 per cent from 11.77 per cent at the end of the second quarter of this fiscal, and rose from 9.38 per cent at the end of the corresponding quarter of the preceding year. The bank plans to raise Rs 1,000 crore to shore up its Tier-II capital, which stood at 4.04 per cent.

The bank's retail advances jumped from Rs 3,917 crore as in December 2004, to Rs 5,778 crore in December 2005, a growth of 48 per cent. Retail advances now account for 30 per cent of the total advances, which stood at Rs 19,531 crore, as at end December 2005.

The daily average cost of funds rose to 4.86 per cent in the reporting quarter as compared to 4.75 per cent in the comparable quarter of the preceding year.