Vijaya Bank expects Rs 450 cr profit this year

Vijaya Bank expects to close the year with a net profit of Rs 450 crore compared with Rs 331 crore in the last financial year.

It has already surpassed the current year's business target of Rs 76,000 crore by achieving total business of Rs 71,607 crore in the nine-month period ended December 31, 2007.

The bank's net profit for the nine-month period ended December 31, 2007, has surpassed last year's figure of Rs 334 crore.

Disclosing this here on Wednesday, Chairman and Managing Director Prakash P Mallya said the bank had enough scope to set a higher target for business (which includes deposits plus loans) growth as it had recently raised Rs 200 crore Tier-I capital.

"We aim to touch the Rs 1-lakh-crore business target by 2010 and the bank sees no problem in meeting the additional requirement of funds since we can still raise up to Rs 1,900 crore capital from the market," he said.

Citing cost of funds as a major factor in considering rate cuts in the bank's portfolio, Mallya said the softening of interest rates "" from a quarter to 0.5 per cent level "" might happen in April or May.

"Clients have more options for investment such as mutual funds and they are not ready to keep all the eggs in one basket," he said, while explaining the difficulties faced by banks in raising savings deposits.

Responding to a question on the bank's lookout for possible acquisitions to increase its presence in northern and western parts of India, Mallya said that nothing concrete had been worked out so far.

He, however, said the consolidation in banking industry would pick up momentum in the next couple of years.

Credit offtake across public sector banks is expected to settle at a growth of between 23 per cent and 25 per cent in FY08 compared with 30 per cent until recently, according to him.

"We witnessed a fall in credit offtake last quarter, which could also be because industrialists and entrepreneurs were waiting for a reduction in interest rates before going for bank loans," he said, while suggesting that the year may end up with a lower credit growth compared with the last financial year.