Confident of higher NIMs, net profit in Q4: Vijaya Bank

The bank's third quarter profit jumped 3.3 times year-on-year to Rs 37.4 crore led by other income and operating profit. However, higher provisions restricted growth in bottomline.

Below is the transcript of Kishore Sansi’s interview with Sumaira Abidi & Reema Tendulkar on CNBC-TV18.Sumaira: In terms of your profitability you have done about Rs 37.4 crore from last year’s base of about Rs 11 crore odd. Can you tell us how the rest of your parameters have shaped up? We do not have your net interest income as well as what are the provisioning you all have done this quarter? A: This quarter out of that operating total operating profit of Rs 342 crore, we have made a provision close to Rs 289 crore that means most of the net interest income and most of the operating profit has contributed to the provisions for the impaired assets. So, that is how my net profit has come down drastically. Sumaira: There is significant rise in your net non-performing assets (NPA) – it is almost at 1.9 percent mark and gross NPAs have rise a percent, so on a percentage the figure is at 2.92 percent. Can you give us the absolute terms - what your gross as well as net NPA stands at and what has led to this sharp rise this quarter?A: Our gross NPA in the absolute term is Rs 2,311 crore, which is 2.92 percent of my total advances portfolio. Net NPA in the absolute terms is Rs 1,476 crore, which constitutes about Rs 1.89 crore with the provisional coverage ratio of Rs 65.77 crore. So the sharp increase in the gross NPA and the net NPA has seen because of the fresh NPA of about Rs 728 crore added during this quarter. Even though we have made a recovery of Rs 500 crore but still there is a net increase of close Rs 200 crore in spite of having done some write offs too. So that is how there is a net increase but we have been able to maintain our asset quality within 3 percent and 2 percent as far as the gross and net NPA is concerned.Reema: Could you tell us what the fresh restructuring was in the quarter and what would the restructured book now look like?A: Total restructuring book is Rs 5,280 crore and the fresh restructuring done in this quarter is Rs 200 crore. Our total impaired assets including restructured advances and the NPA is about 8.50 percent. Reema: Could you tell us what the net interest margins were this quarter as well as what the outlook is looking like for the next two quarters?A: As net interest margin is under stressed, we are about 1.90 percent. However, our current quarter guidance is that we will shed lot of high cost deposits which is having a direct impact on our cost of deposits. So we expect to shed close to about Rs 8,000 crore of a high cost deposit during the current quarter. I expect by next quarter by March 2015, our net interest margin should cross 2 percent. Reema: Could you tell us what the outlook is looking like in terms of asset quality? How do you expect the slippages up gradations as well as the recoveries to be in this quarter?A: For the next two months our entire emphasis would be on the recovery; we are having a special campaign and are expecting close to Rs 600 crore of a additional recovery which will constitute up gradations of to the tune of about Rs 800 crore because these three quarters we have seen a massive slippage on to the NPA. Our target is to ensure that it is at least Rs 800 crore of recovery/upgradation happens during the current quarter. We have been very conservative we have made lot of extra provisions during this quarter so going forward March 15 look like a very good quarter for us - where not only NPAs would be under control but entire net interest margins, operating profit and net profit would be much higher.