The Hindu Business Line : LVB sees gains from re-pricing high cost deposits

The bank’s Managing Director and CEO, Mr V.S. Reddy, told Business Line the bank is offering 7.5 per cent on one-year deposits, compared with 10.5 per cent last year.

He said he did not anticipate any liquidity problems, or flight of deposits, because LVB’s rates are still better than its peer banks.

The bank has about Rs 2,500 crore high-cost deposits and half of it will come up for renewal this year. This should fuel the bank’s growth in profits, he said.

Five-fold rise in net

Lakshmi Vilas Bank reported a five-fold jump in net profits to Rs 22.6 crore for the first quarter of 2009-10 compared with Rs 4.28 crore for the same period last year. The rise in net profits was aided by the growth in other income than treasury income.

Other income increased 64 per cent to Rs 25.7 crore (Rs 15.6 crore).

During the first quarter of 2009-10, LVB’s gross non-performing assets (NPAs) ratio was 2.71 per cent (3.64 per cent). Net NPA was 1.32 per cent (1.66 per cent).

Mr Reddy said, “We have recovered about Rs 23 crore in the last four months and have plans to bring down gross NPA to Rs 120 crore by the year-end from Rs 150 crore currently.”

Meanwhile, LVB has signed an MoU with BSNL, under which the bank would enjoy a ‘preferred customer’ status. This will enable the bank to speed up its ongoing projects with enhanced bandwidth requirements, says a press release from LVB.

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