ING Vysya Bank Announces it''s working results for the financial year 2003- 04
By Our Banking Bureau | 17 May 2004
For the year ended March 2004, the Bank achieved a record profit before provisions and taxes of Rs 261.80 crore. Even in a declining interest rate regime, the Bank was able to improve interest spread by 12.52% to Rs 244.10 crore. While the profit on the sale of investments was down by Rs 22.12 crore on the previous year and reached Rs 184.78 crore, other income has increased by 20.80% to Rs 160.28 crore. The increase in operating expenses was limited to 3.65%. Major increase in operating expense is IT related.
In the current year, notwithstanding the introduction of the 90 day norm, and consequential to a successful recovery strategy, the Bank has been able to limit the provisions for non-performing assets and standard assets to Rs 49.97 crore net (compared to Rs.104.28 crore of the previous year). The result is that the Bank's net non-performing assets has been reduced to Rs 183.36 crore (on 90 day basis) from Rs 199.14 crore (180 day basis) and the Bank's net NPA position has been reduced from 3.55% to 2.60%.
The total assets of the Bank, for the fiscal year under review, increased to Rs.13198.34 crore from Rs.11458.82 crore recording a growth rate of 15.18 %.
The deposits of the Bank increased by 14.06% or Rs.1291.35 crore, from Rs.9186.62 crore in March, 2003 to Rs.10478.07 crore in March, 2004. As result of the introduction of the Orange account products, low cost (savings bank and demand deposits) have increased by 34.9% or Rs.675.11 crore. The share of low cost deposits has as a result of this increased to 24.9% compared to 21.06% in the previous year. Term deposits have increased by 8.5% or 616.33 crore. To ensure that deposit profile is in line with advances profile for effective Asset Liability Management and also for making sure that the cost of funds are aligned with market dynamics, there has been also a change in the mix of term deposits with wholesale deposits (in excess of Rs 1cr) increasing to 30.61% of total customer deposits. The increase in wholesale deposits is largely due to the 76.7% increase in NRI deposits, which has been achieved due to our tie-up with the ING Group network.
Due to periodical reduction in interest rates being offered on various maturities, the cost of deposits declined from 7.58% in 2002-03 to 6.29% in 2003-04.
Advances of the Bank grew by 25.6% during the fiscal increasing from Rs.5611.61 crore in March 2003 to Rs.7046.51 crore in March 2004. The yield on advances declined from 11.29% to 9.90% between 2002-03 and 2003-04. The decline in yield on advances is due to the 25 basis points reduction in PLR affected during January 2004 and in line with the market trend.
The growth in advances is more or less evenly spread across all business units with the share of Corporate Finance and Investment Banking (handling tier I corporates as well as subsidiaries of MNCs) being 33.13% of total advances (32.89% the previous year) and the share of retail having increased from 9.44% in 2003 to 13.23% in 2004.
