Allahabad Bank net rises 21%

Lender reports net profit of Rs 402.57 crore for the second quarter

Backed by higher interest income, public sector lender Allahabad Bank on Thursday reported a net profit of Rs 402.57 crore for the quarter ended September, a 20.68 per cent rise from Rs 333.59 crore in the same period last year.

The bank’s net interest margin increased to 3.34 per cent in the second quarter, as against 2.84 per cent in the same period last year and 3.10 per cent in the first quarter of the current financial year.

“We have been able to reduce the cost of borrowing and at the same time get better yields. Also, we are not doing short-term lending, which reflected in the profits,” said Chairman and Managing Director. The cost of deposits in the second quarter stood at 5.74 per cent, as against 6.3 per cent in the same period last year. The yield on advances was 10.35 per cent, as against 10.84 per cent in the same period last year. The net interest income rose by 60.6 per cent to Rs 969.2 crore, as against Rs 603.2 crore in the same quarter an year ago.

However, on account of the debt relief scheme, the bank reported an additional Rs 220 crore non-performing assets (NPAs). The NPAs from agriculture lending stood at Rs 250 crore. As a result, the net NPA to net advances increased to 0.56 per cent in the September quarter, as against 0.41 per cent in the quarter-ended June and 0.35 per cent in the September 2009 quarter. The treasury income stood at Rs 38 crore.

The bank reported 36.83 per cent growth in advances and a 30.15 per cent rise in deposits.

“In the beginning of the quarter, we had a good number of sanctions. We also added about 100 mid and small corporates, which led to the rise in advances,” said Dua.

Allahabad Bank has approached the government for capital infusion of Rs 1,000 crore. It has a headroom to raise Rs 2,600 crore as Tier-II capital, of which it has the approval to raise Rs 1,400 crore this year.
 

HEALTHY GROWTH PERFORMANCE IN QUARTER ENDED SEPTEMBER
(in Rs crore)	Allahabad Bank		Corporation Bank		South Indian Bank
	Sep ‘10	% Chg*	Sep ‘10	% Chg*	Sep ‘10	% Chg*
Interest earned	2,636.92	28.84	2,158.11	21.96	579.53	23.60
Other income	344.74	-14.84	226.13	-25.32	44.85	-31.54
Total income	2,981.66	21.62	2,384.24	15.05	624.38	16.84
Interest expended	1,667.73	15.54	1,442.87	13.97	382.21	25.86
Net interest income	969.19	60.66	715.24	42.05	197.32	19.44
Net profit	402.57	20.68	351.73	20.59	77.00	6.12
*Over previous year,  Data compiled by BS Research Bureau                                                                     Source : Capitaline

The bank has also sought licence from the Reserve Bank of India to open branches in Shanghai, Dhaka and a second branch in Hong Kong. Recently, the bank also reconstituted the board of its wholly-owned subsidiary, AllBank Finance Ltd. It is also planning to enter the broking business.