UTI Bank: Corporates' bring in the cream - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

UTI Bank: Corporates' bring in the cream

Oct 24, 2002

UTI Bank's strong growth in FY03 continues. For 2QFY03 the bank reported a significant 43% profit growth led by 34% growth in interest income. Higher growth in earnings was achieved despite a 40% hike in provisions for non-performing assets.

(Rs m)2QFY022QFY03Change1HFY021HFY03Change
Income from operations 2,741 3,674 34.0% 5,405 7,018 29.8%
Other Income 922 1,184 28.5% 1,931 1,782 -7.7%
Interest expense 2,345 2,960 26.2% 4,733 5,705 20.5%
Net interest income 396 714 80.3% 672 1,313 95.3%
Other expenses 476 763 60.1% 903 1,362 50.8%
Operating Profit (80) (48)-39.8% (231) (49)-78.8%
Operating Profit Margin (%)-2.9%-1.3% -4.3%-0.7% 
Provisions and contingencies 328 45940.2% 746 480-35.7%
Profit before Tax 514 67631.7% 954 1,25431.4%
Tax 204 23514.9% 391 45215.7%
Profit after Tax/(Loss) 310 44242.7% 563 80242.3%
Net profit margin (%)11.3%12.0% 10.4%11.4% 
No. of Shares (m) 131.9 191.8   131.9 191.9  
Diluted Earnings per share*6.59.2 5.98.4 
P/E Ratio 4.1  4.5 
*(annualised)      

The bank's core interest income recorded a very strong growth of 59% during the quarter largely due to the rise in disbursals by the bank. The net interest income of UTI Bank saw a sharp growth of 80% during the quarter. The growth has been driven by a 50% surge in advances (up from Rs 44.6 bn in September last year to Rs 67.1 bn). An increase in other income too aided pre-tax profit growth.

Interest income break-up
(Rs m)2QFY022QFY03Change1HFY021HFY03Change
Interest on advances 1,190 1,898 59.4% 2,447 3,504 43.2%
Income on investments 1,326 1,171 -11.7% 2,629 2,767 5.2%
Interest on balance with RBI 73 97 32.5% 154 223 44.6%
Others 151 508 236.3% 174 523 200.5%
Total 2,741 3,674 34.0% 5,405 7,018 29.8%

UTI Bank's retail initiatives continue to aid its performance. The savings bank (SB) deposit base grew by over 59% YoY to Rs 10.9 bn as on 30th September '02. The SB customer accounts grew significantly from 400,565 to 720,064 during the same period, a growth of 80% YoY. The retail asset base has grown over 144% to Rs 7 bn YoY. The bank has identified housing and personal loans as key focus areas.

While retail banking's contribution to total revenues increased from 9% in 2QFY02 to 14.5% in the September quarter this year due to a huge 300% surge in retail banking revenues, the PBIT from this segment was negative and proved to be a drag on overall profitability. Though corporate banking share in revenues dipped from 51% levels to 48.5% in 2QFY03, the segment's share in profits expanded significantly to 92% of total PBIT.

Revenue pie break-up
 2QFY022QFY031HFY021HFY03
Corporate Banking50.9%48.5%50.9%48.6%
Retail Banking9.0%14.5%8.3%14.7%
Treasury 40.0%37.1%40.6%36.7%
Others0.1%0.0%0.1%0.0%
Total100.0%100.0%100.0%100.0%

At the current market price of Rs 38, UTI Bank is trading at a P/E of 4.5x 1HFY03 annualised earnings and adjusted price to book value ratio of 1.5x. The bank's aggressive expansion has reduced its capital adequacy ratio to 9.7% as on September 2002 from 10.7% in March 2002. The bank has appointed Saloman Smith Barney to raise funds to improve its capital adequacy ratio.


Equitymaster requests your view! Post a comment on "UTI Bank: Corporates' bring in the cream". Click here!

  

More Views on News

AXIS BANK Announces Quarterly Results (1QFY21); Net Profit Down 18.8% (Quarterly Result Update)

Jul 30, 2020 | Updated on Jul 30, 2020

For the quarter ended June 2020, AXIS BANK has posted a net profit of Rs 11 bn (down 18.8% YoY). Sales on the other hand came in at Rs 165 bn (up 8.4% YoY). Read on for a complete analysis of AXIS BANK's quarterly results.

AXIS BANK Announces Quarterly Results (4QFY20); Net Profit Down 192.2% (Quarterly Result Update)

Apr 30, 2020 | Updated on Apr 30, 2020

For the quarter ended March 2020, AXIS BANK has posted a net profit of Rs 14 bn (down 192.2% YoY). Sales on the other hand came in at Rs 162 bn (up 9.7% YoY). Read on for a complete analysis of AXIS BANK's quarterly results.

How the YES Bank Collapse Unfolded - 10 Points (Sector Info)

Mar 9, 2020

A timeline of how YES Bank went from a stock market darling to a pariah.

Today's Stock Market Crash: 10 Points (Sector Info)

Mar 6, 2020

Top factors that dragged the markets lower today.

More Views on News

Most Popular

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

My Top Stock to Buy in this Market Selloff (Profit Hunter)

Sep 22, 2020

The recent correction offers a great opportunity to buy this high conviction smallcap stock.

Can the Nifty Fall to 10,200? (Fast Profits Daily)

Sep 24, 2020

The Nifty has reached an important support level today. If it breaks then we could see further downside.

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

AXIS BANK SHARE PRICE


Sep 30, 2020 (Close)

TRACK AXIS BANK

  • Track your investment in AXIS BANK with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

AXIS BANK 8-QTR ANALYSIS

COMPARE AXIS BANK WITH

MARKET STATS