Mumbai:

The rise in net interest income or core banking income was aided by lower cost of funds, higher proportion of demand deposits and growth in assets. The fall in other income was due to difficult conditions in the debt markets. "There has been a fall in trading income due to the choppy conditions in the market. But this fall has been more than compensated by the jumps in fee income and net interest income and lower provisioning," said PJ Nayak, CMD, UTI Bank.

The total income dipped to Rs535.49 crore (Rs544.20 crore) and total expenditure increased to Rs389.80 crore (Rs355.44 crore).

Provisions and contingencies have reduced considerably to Rs38.57 crore (Rs91.71 crore). "We had provisioned very aggressively last year and have a provision and write off cover of over 82 per cent so we had to provision less this quarter," said Dr Nayak. Net NPAs to net customer assets was at 1.16 per cent.

Other income consists of trading income, which fell, and fee income, which surged. UTI Bank''s trading profits dipped by 74 per cent year-on-year to Rs31.05 crore in the first quarter FY05 (Rs117.71 crore). The share of trading profits to the operating revenue declined from 44 per cent in the first quarter of the preceding year to 11 per cent in the first quarter of FY05.

Fee income of the bank, which consists of guarantees, letters of credit, trusteeship, cash management and retail fees such as ATM interchange fees, increased 143 per cent to Rs79.03 crore (Rs32.55 crore).

The bank has ended the first quarter of the current financial year with a capital adequacy ratio of 11.11 per cent, said a release from the bank.

Net interest margin increased to 3.01 per cent up from 2.75 per cent in corresponding period of the preceding year.

UTI Bank''s share price jumped more than 3 per cent on both BSE and NSE to close at Rs125.90 on the BSE, and at Rs124.95 on the NSE.