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Calcutta/Mumbai, Jan. 28: Armed with a new base rate system for lending and a significant improvement in low-cost deposits, Allahabad Bank, UCO Bank and Bank of Baroda today reported a hefty growth in their net interest income, resulting in an over 20 per cent growth in net profit for the quarter ended December 2010.
While Allahabad Bank posted a 20.39 per cent jump in net profit for the third quarter of the current financial year at Rs 415 crore, Uco Bank’s net rose 22.35 per cent year-on-year to Rs 301 crore. Bank of Baroda’s net profit rose 28.4 per cent to Rs 1,068.88 crore.
Allahabad Bank’s net interest income (NII) increased 55.67 per cent to Rs 1,051.63 crore, while that of Uco Bank surged 69.10 per cent to Rs 1,062 crore. NII is interest earned minus interest paid.
“In the third quarter, we re-priced all our assets (read, advances) while on the resources side we moved out of bulk deposits and increased the share of low-cost savings and current bank account deposits. This way we have been able to contain our cost of funds and increase the yield on advances,” said J.P. Dua, chairman of Allahabad Bank.
UCO Bank chairman Arun Kaul said instead of depending on bulk deposits, the bank relied more on raising money through certificate of deposits from institutional investors and at the same time increased the share of savings bank account deposits.
On the lending side, both the banks got rid of low-yielding loans following the implementation of the base rate system from September 2010.
BoB’s third-quarter net profit rose to Rs 1,068.88 crore from Rs 832.49 crore last year. A strong demand for loans coupled with a good share of low-cost current and savings account deposits was reflected in the bank’s NII, which rose 43.2 per cent to Rs 2,292.26 crore from Rs 1,601.23 crore last year.
While Allahabad Bank posted a 20.39 per cent jump in net profit for the third quarter of the current financial year at Rs 415 crore, Uco Bank’s net rose 22.35 per cent year-on-year to Rs 301 crore. Bank of Baroda’s net profit rose 28.4 per cent to Rs 1,068.88 crore.
Allahabad Bank’s net interest income (NII) increased 55.67 per cent to Rs 1,051.63 crore, while that of Uco Bank surged 69.10 per cent to Rs 1,062 crore. NII is interest earned minus interest paid.
“In the third quarter, we re-priced all our assets (read, advances) while on the resources side we moved out of bulk deposits and increased the share of low-cost savings and current bank account deposits. This way we have been able to contain our cost of funds and increase the yield on advances,” said J.P. Dua, chairman of Allahabad Bank.
UCO Bank chairman Arun Kaul said instead of depending on bulk deposits, the bank relied more on raising money through certificate of deposits from institutional investors and at the same time increased the share of savings bank account deposits.
On the lending side, both the banks got rid of low-yielding loans following the implementation of the base rate system from September 2010.
BoB’s third-quarter net profit rose to Rs 1,068.88 crore from Rs 832.49 crore last year. A strong demand for loans coupled with a good share of low-cost current and savings account deposits was reflected in the bank’s NII, which rose 43.2 per cent to Rs 2,292.26 crore from Rs 1,601.23 crore last year.
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