Trading Income Boosts Vijaya Bank’s Q3 Net, But is Show Sustainable?
Mumbai: Innovative retail banking and rallying bonds have helped a small Indian lender overcome concerns over credit demand, upending conventional wisdom that the November 8 currency exchange programme would hinder the recovery of an industry grappling with deteriorating asset quality.
On Thursday, Bengaluru-based Vijaya Bank was the latest in harnessing growing investor appetite for bonds and retail demand for credit to overcome an onyear slippage in the quality of its advances, joining a swelling list of South Asian lendersthathavereliedonretail-banking innovation to mitigate the currency-exchange impact. India’s biggest private lender ICICI Bank expanded its retail bookby18%,whileAxisBankregistered a 15% growth in its retail segment in the December quarter that witnessed serpentine queues of Indians seeking to either exchange 500- and 1,000-rupee bills that had ceased to be legal tender, or to withdraw fresh bills the disbursal of which was rationed by the central bank.
At state-run Vijaya Bank, retail credit expanded 23%, with advances increasing to ₹ 27,284 crore at the end of the quarter under review. Trading profits, fee income and transfer deposits after demonetisation were instrumental in the four-fold net profit increase at ₹ 230 crore. Treasury operations returned a profit of ₹ 107 crore.