<p>State-run Allahabad Bank on Monday said its net profit for the quarter ended June 30, 2012, expanded 23 per cent from a year ago to Rs 514 crore on the back of strong recoveries and growth in interest income.
Net interest income, or the difference between interest income and interest expense, rose 11 per cent year-on-year to Rs 1,306 crore during the quarter. Net interest margin, however, narrowed by 23 basis points from a year ago and by six basis points sequentially to 3.17 per cent as cost of funds increased at a faster pace than yield on advances.
“We will try to keep our net interest margin above three per cent this financial year,” said J P Dua, CMD,Allahabad Bank.
The bank’s trading profit more than doubled to Rs 55 crore during the quarter.
The government-owned bank saw erosion in its asset quality as there were slippages in its farm and micro, small and medium enterprise (MSME) loan portfolios. Dua said fresh slippages during the quarter were around Rs 590 crore.
Gross non-performing asset ratio deteriorated by 34 basis points to 1.96 per cent, while net bad loan ratio increased by 49 basis points to 1.09 per cent at the end of June 2012. The bank recovered close to Rs 404 crore loans during the quarter compared with Rs 260 crore a year ago.
Provisions against non-performing assets increased to Rs 270 crore in April-June from Rs 166 crore a year earlier.
The bank restructured Rs 4,770 crore loans during the three-month period, bulk of which were advances to state electricity boards. The bank’s restructured loan portfolio was Rs 10,727 crore at the end of the quarter, of which around Rs 253 crore loans were classified as non-performing.
Gross advances of the bank grew by 12 per cent year-on-year to Rs 110,462 crore at the end of June 2012. The share of retail loans in total advances was around 14 per cent.
Deposits were up 17 per cent at Rs 156,867 crore. Current account savings account (CASA) deposits’ share in total deposits was 30 per cent at the end of the quarter.
“We plan to open three million accounts this year. The target is to increase our CASA ratio to 32 per cent,” Dua said. To support this, the bank will add 250 branches in 2012-13.
Allahabad Bank closed April-June quarter with a capital adequacy ratio of 12.94 per cent.