Private lender Lakshmi Vilas Bank on April 27 saw its Q4 profit grow 22.5% to Rs 49.07 crore year-over-year from strength in its retail and SME lending.
The commercial lender’s Q4 net income increased 14.3% to Rs 758.84 crore from Rs 663.97 crore for the same period last year.
“We are seeing lending opportunities in the pharma and real estate sector. And we are looking at broadening the scope of our agricultural loans. We have met our statutory target by ensuring we have 18% of agri loans (Rs 2,800 crore) on our book,” said Parthasarathi Mukherjee, MD & CEO, Lakshmi Vilas Bank.
“Unlike popular perception, agriculture or metals are not per se bad sectors to lend to. It’s a matter of being selective in our approach. We view agri loans as a promising business segment,” he said, adding the bank had seen most of its delinquencies from loans given to companies in the commodities and metals and mining sector.
The lender, saw its asset quality improve with gross Non-Performing Assets (NPA) of Lakshmi Vilas Bank down to 1.97% in Q4 from 2.75% a year ago. Net NPAs also improved to 1.18%, compared to 1.85%.
Net Interest Income (NII) of the bank increased by 16.71% to Rs 666.33 crore. NII of a bank is the difference between the income it earns from interest on its loans and the interest it has to pay out on its deposits.
Lakshmi Vilas Bank’s Return On Equity (ROE) for Q4 stood at 12.27% as against 10.84% for the same period last year. ROE is a measure of a company’s profitability as it compares the net income to average shareholders’ equity and a higher ROE usually indicates better returns to investors. The company said its board recommended a 30% increase in its next dividend, subject to approval.
The bank said its capital adequacy was in line with Reserve Bank of India’s guidelines at 10.67% as of March 31, 2016.
“We are satisfied with our performance. The only possible areas of improvement we can see are with regard to our CASA deposits and our net interest income,” said Lakshmi Vilas Bank CFO Palaniappan M. CASA deposits at the bank have grown by 20.58% year over year to Rs 4,415.51 crore.
Chennai-headquartered Lakshmi Vilas Bank, which has a network of 460 branches, said it plans to open 60 more branches in the coming year in the neighbouring states of Tamil Nadu. For the full year, profit rose 36.25% to Rs 180.23 crore.
Source: The Times of India
Image Courtesy : The Hindu Business Line
