Lakshmi Vilas Bank has registered a 10.35 per cent increase in net profit in the quarter ended December 2011 compared to the corresponding year-ago period.
The bank's net profit rose to Rs 28.35 crore (Rs 25.69 crore) and its total income was up 49 per cent at Rs 429.49 crore (Rs 287.57 crore).
However, compared to the 49 per cent growth in its total income, the total expenditure swelled 66.4 per cent to Rs 381.38 crore (Rs 229.09 crore).
Higher expenditure
Explaining the reason for the significant increase on the expenditure side, LVB's Chief Executive, Mr P. R. Somasundaram, told
The bank hired around 425 people during the third quarter of 2011-12 as against around 160 during the corresponding quarter of the earlier fiscal. The quarter also witnessed aggressive expansion of its ATMs to 509.
“Coupled with the intake of people, there has also been a rise in the dearness allowance. Further, this addition has happened only at the fag end of the quarter. Going forward, it will stabilise and we see returns on our investments,” he added.
Total deposits registered a year-on-year growth of 33.4 per cent to touch Rs 13,281 crore, while the gross credit expansion (YoY) was up 35 per cent at Rs 9,344 crore.
While gross NPAs (non-performing assets) declined to 2.42 per cent from 2.98 per cent during the corresponding third quarter of the earlier fiscal, they are more than the 2.24 per cent in the quarter ended September 2011.
Mr Somasundaram admitted to a slight slippage in the NPA level, but maintained that there was ‘no serious impairment'.
To boost its capital-adequacy ratio to around 13.6 per cent from 10.82 per cent as at end-December 2011, the bank has raised Tier-II bonds worth Rs 250 crore.