NEW DELHI, JULY 22:
Public sector Vijaya Bank has reported 13.4 per cent increase in net profit at Rs. 161.66 crore for the first quarter ended June 30, 2016-17.
The bank had reported a net profit of Rs. 142.59 crore in the April-June quarter of the previous fiscal 2015-16.
Total earnings of the bank rose marginally to Rs. 3,295.05 crore during the first quarter from Rs. 3,289.05 in the year-ago period, Vijaya Bank said in a regulatory filing.
However, the bank’s asset quality worsened, as its gross non-performing assets (NPAs) rose to 7.31 per cent of the gross advances as of June, from 3.39 per cent a year ago.
Likewise, net NPAs or bad loans stood at 5.42 per cent of net advances at the end of June, almost double that from 2.45 per cent a year-ago.
Consequently, provisions for bad loans and contingencies were raised significantly to Rs. 267.82 crore from Rs. 146.38 crore a year-ago.
Public sector banks are cleaning up their balance sheets as part of the Reserve Bank’s asset quality review (AQR) guidelines and are required to park a higher amount towards bad loans.
A higher allocation for bad loans is one of the main reasons behind most of the public sector banks reporting either losses or lower profits.
Vijaya Bank stock was trading Rs. 3.61 per cent higher at Rs. 43.05 in the afternoon trade on the BSE....