Stock Review: Vijaya Bank

Vijaya Bank's bottomline grew at a compounded annual rate of 31% over the last five years.

   The growth of this South-based state run bank has been sluggish over the last two years, but over the past six months, it has streamlined its processes, and strengthened its credit appraisal system to aid advances growth.

   The bank recently received a capital infusion of 370 crore from the government. The infusion will help the bank improve credit growth and maintain its net interest margin at 2.8% or above.

   At a price-earning multiple of 6.6, the bank's valuation is cheap in comparison with P/Es of 8-10 for its peers. The future performance of the bank will hinge on its ability to maintain the momentum in advances and to curb bad loans.