Shares of Vijaya Bank flared up on the stock exchanges on Friday in tandem with other bank stocks even as the state-run bank reported an increase of 40 percent in net profit for the quarter ended December 2015.
The spike in net profit was due to a 33 percent rise in net interest income, though the bank reported a decline in total income and a sharp rise in non-performing assets (NPAs).
Net profit was Rs 52.61 crore, up 40.54 percent from Rs 37.40 crore during the corresponding quarter last fiscal, while total income stood at Rs 3,237.02 crore, down marginally from Rs 3,302.67 crore in the year-ago period, the bank said in a regulatory filing to the BSE on Friday.
The bank's operating margin buoyed due to a fall in interest expended, which was Rs 2,290 crore during the quarter under review, down 7.5 percent from Rs 2,478 crore during the third quarter ended December 2014.
Net interest income was Rs 738 crore in Q3, FY2016, up 32.97 percent from Rs 555 crore in the corresponding period.
Gross NPAs as a percentage of total advances stood at 4.32 percent, up sharply from 2.92 percent, y-o-y, while net NPAs rose to 2.98 percent from 1.89 percent during the third quarter last fiscal.
Provisioning for NPAs was Rs 317.39 crore, a marginal increase over Rs 308.39 crore, y-o-y.
The provision coverage ratio as at 31 December, 2015 was 58.07, the Bengaluru-based bank said.
On 3 February, the bank had informed the BSE that Murali Ramaswamy (General Manager), was appointed as the Chief Financial Officer with effect from 25 January, 2016.
The Vijaya Bank stock closed at Rs 34.30 on the BSE on Friday, up 15.88 percent from its previous close.
Canara Bank, another Bengaluru-based public sector bank, will be declaring its third quarter results on 12 February.
Shares of most banks rallied on Friday along with pharma stocks. The S&P BSE Sensex rose 278 points to close at 24,617, a gain of 1.14 percent.