Trad­ing In­come Boosts Vi­jaya Bank’s Q3 Net, But is Show Sus­tain­able?

The Economic Times - - Companies: Pursuit Of Profit - FI­NANCE & COM­MODI­TIES

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.

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