UTI Bank announces Q1 results

UTI Bank has announced its unaudited results for the first quarter of FY 2004-05 following the approval of its Board of Directors in a meeting held in Mumbai on 14th July 2004.

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Following is the remaining text of the press release issued by the bank today.

The Net Profit of the Bank for the first quarter was Rs. 70.67 crores, a growth of 35.44% over the Net Profit of Rs. 52.18 crores during the first quarter of the previous year. The Bank has ended the first quarter of the current financial year with a capital adequacy ratio of 11.11% and Net NPAs at 1.16% of Net Customer Assets. The quarterly EPS at Rs. 3.00 was 33% higher than the EPS of Rs. 2.26 in the first quarter of the previous year.

RESULTS FOR Q1 FY 04-05: UTI Bank announced a Net Profit of Rs. 70.67 crores for the first quarter of the financial year 2004-05, a growth of 35.44% over the Net Profit of Rs. 52.18 crores for the first quarter of the financial year 2003-04. The Net Interest Income for Q1 was Rs. 165.00 crores, as compared to Rs. 120.20 crores during Q1 of the previous year, a growth of 37.27% yoy. The Net Interest Margin for Q1 was 3.01% as compared to 2.75% for Q1 of the preceding year. These growth rates indicate that profitability and margins have grown strongly.

Q1 Performance Highlights

Rising Net Interest Income (NII)

The Bank registered a buoyant 37% yoy growth in Q1 in its Net Interest Income of Rs. 165.00 crores as against Rs. 120.20 crores in Q1 of the previous year. Lower cost of funds aided by the much higher share of demand deposits, together with the growth in assets, contributed to the rise in Net Interest Income. The advances of the Bank grew to Rs. 9,910 crores as at end June'04 from Rs. 6,827 crores as at end June'03, a growth of 45% yoy.

Increasing Margins and Lower Cost of Funds

The Net Interest Margin (NIM) for Q1 increased to 3.01%, from the NIM of 2.75% in Q1 of the previous year.

The daily average cost of funds decreased further to 4.83% in Q1 and has dropped significantly from 6.35% in Q1 of the preceding year, FY 2002-03.

The share of low cost deposits - Savings Bank and Current Account - rose to 28% as at end June'04 as compared to 22% as at end June'03. Savings Bank deposits registered a growth of 88% yoy, from Rs. 1,587 crores as at end June'03 to Rs. 2,979 crores as at end June'04. Current Account deposits grew 35% yoy, from Rs. 2,074 crores as at end June'03 to Rs. 2,797 crores as at end June'04.

Trading Profits

The Bank generated Rs. 31.05 crores of trading profits in Q1, as compared to Rs. 117.71 crore in Q1 of the preceding year, a fall of 74% yoy. The share of trading profits to the operating revenue declined from 44% in Q1 of the preceding year to 11% in Q1 of FY 04-05. The growth in the profitability of the Bank has been achieved despite such a steep fall in trading profits.

Prudent NPA Management

The Net NPAs as proportion of Net Customer Assets were at 1.16% as at end June'04, significantly down from 2.46% at end June'03 and marginally up from 1.03% as at end March'04. The Bank has in recent years written off impaired assets aggressively. The provisions held together with accumulated write-offs as a proportion of Gross NPAs and accumulated write-offs amount to 82.13% at end June'04. If the accumulated write-offs are excluded, then the provisions held as a proportion of Gross NPA amounts to 53.75% as at end June'04.

Fee Income

Fee Income registered a strong growth of 143% yoy, rising to Rs. 79.03 crores in Q1 as compared to Rs. 32.55 crores in Q1 of the preceding year.

Cash Management Services

Under Cash Management Services, the Bank handled a cash remittance throughput of Rs. 26,855 crores in Q1 as compared to a throughput of Rs 17,915 crores during Q1 of the preceding year, a growth of 50% yoy. The number of CMS clients has grown to 731 as at end June'04.

Placement / Syndication and project Advisory

The Bank continued to maintain its leadership position in the placement and syndication of corporate bonds. UTI Bank was ranked 10th in Asia in the Thomson Financial April-June 2004 Asian Debt League Table Rankings in Debt Placement and Syndication. UTI Bank is the only Bank in India to figure in the rankings. The Bank placed debt to the tune of Rs. 2068 crore in Q1 of the current year as compared to Rs. 2489 crores in Q1 of the preceding year.

Growing Retail Business

The Bank's retail business continued to show strong growth. The number of Savings Bank accounts grew from 10.64 lakhs as at end June'03 to 18.22 lakhs as at end June'04, thereby creating a buoyancy in Savings Bank deposit balances.

Retail advances registered a significant jump, moving from Rs. 1,212 crores as at end June'03 to Rs. 2,326 crores as at end June'04, a growth of 92%. Retail Advances now account for 23.47% of the total Advances of the Bank as at end June'04. The Bank has set up Retail Asset Centres (RACs) at 8 cities and Satellite RACs (SRACs) at 12 additional cities for focussed retail lending.

Network Expansion

The Bank's ATM network of 1,333 ATMs is the third largest in the country, up from 900 ATMs a year earlier, an increase of 48% yoy. The Bank has a wide presence through its 286 Branches & Extension Counters across 141 cities, towns and villages, up from 203 Branches and Extension Counters across 89 cities and towns a year earlier. The Bank opened its first set of 5 rural branches during the quarter.

New Products

The Bank became the first Bank to launch a multi-currency pre-paid Travel card by launching the Euro and Pound Sterling variants of the UTI Bank Travel Currency in June'04. The Bank has received an enthusiastic business response to its new ventures. The Bank's International Debit Card issuance has risen to 19 lakh debit cards as at end June'04.

Capital & Net Worth:

The Net Worth of the Bank stood at Rs. 1,210 crores as at end June'04 as compared to Rs. 971.74 crores a year earlier, a growth of 25%. The Capital Adequacy Ratio for the Bank was at 11.11%, as at end June'04, as compared to 10.71% as at end June'03. The Tier - I capital amounted to 6.46%.