Banks fare well in Q3 show despite slow credit growth
Despite a lower rate of bank credit growth this
year, banks are reporting a healthy growth in their profits for the third
quarter. With bond yields softening and credit picking up, banks are heading
for a fourth quarter with decent earnings. However, the fourth-quarter profits
will also depend on the ability of banks to retain their net interest margins.
Bank of Baroda
Bank of Baroda has recorded a 52% growth in
net profit for the quarter ended December 2007 on the back of a strong growth
in other income (trading profits and other fee-based income) and lower growth
in operating expenses. The net profit rose to Rs 501 crore during Q3 of ’07-08
compared to Rs 329 crore in the same period a year ago. Total income rose 35.7%
from Rs 2,668.1 crore to Rs 3,620.2 crore. While interest income rose 28.6%
from Rs 2,334.4 crore to Rs 3,002.2 crore. Other income rose 85.2% from Rs
333.7 crore to Rs 618 crore. Net interest income rose 9.8% from Rs 908.2 crore
to Rs 997.5 crore in the same period, a year ago. Global deposits increased by
22% to Rs 1,36,900 crore and advances rose by 23% to Rs 95,518 crore in
April-June’07. Retail loans jumped by 25.83% (Y-o-Y) at end-December ’07 to Rs
15,402 crore and it now forms 20.4% of the bank’s credit. Bank’s farm credit
(Y-o-Y) grew by 35.7% to Rs 12,072 crore by end-December ‘07. Gross NPAs fell
to Rs 2,040.3 crore as on December ‘07 from Rs 2,388.7 crore as on December 31,
‘06. CAR at 13.5% at end-December ’07.
IndusInd Bank
IndusInd Bank is planning to raise fresh
capital in this quarter. The bank is looking at raising funds either through a
GDR issue or a qualified institutional placement. The bank had raised above Rs
140 crore in March 2007 through a GDR issue. Hit by a slump in its non-interest
income, the bank on Wednesday announced a 15.76% growth in net profit to Rs 25
crore, up from Rs 22 crore posted in the corresponding quarter of the previous
financial year. The bank saw a 21% dip in non-interest income which stood at Rs
64.5 crore for the reporting quarter compared to Rs 82.4 crore a year ago.
Andhra Bank
Higher net interest margin, coupled with
better treasury profits and fee-based income, has helped Andhra Bank post a
13.1% rise in net profit in the third quarter ended December 2007. Net profit
stood at Rs 451.3 crore compared to Rs 399.1 crore in the quarter ended
December 2006. But total expenditure rose due to a higher interest outgo on
high cost bulk deposits. The bank is on course to shed these deposits. Total
business — deposits and advances — grew by 21.9% to touch Rs 75,225 crore in
the quarter ended December 2007 against Rs 74, 928 crore in the quarter ended
December 2006. The NPAs stood at 0.2%.
Indian Overseas Bank Indian Overseas Bank (IOC) has reported a net
profit of Rs 308 crore for the third quarter of `07-08, an increase of nearly
25% over Rs 247 crore in the corresponding quarter last year. Total income rose
43% to Rs 2,295.3 crore in the quarter ended December ‘07, up from Rs 1,608.1
crore for the same period last year.
Oriental Bank of Commerce
Oriental Bank of Commerce (OBC) has reported a 24% fall in net profit at Rs 138.5 crore for the third quarter ended December 31, 2007 compared to Rs 182.4 crore in the corresponding quarter last year. However, total income jumped 32.4% at Rs 1,915.3 crore for the quarter under review against Rs 1,446.7 crore in the same period a year ago. – www.economictimes.com