Allahabad Bank Q1 net at Rs 128 cr, plans QIP in Q2

Net profit of PSU lender Allahabad Bank stood at Rs 128 crore in the first quarter of current financial year as against a loss of Rs 1944 crore in the similar previous period.

Provisioning for bad loans fell substantially, during the quarter, the bank said.

Operating profit of the bank touched Rs 860 crore in the first quarter of FY 20 as compared to Rs 830 crore in the previous corresponding period.

MD and CEO of Allahabad Bank S S Mallikarjuna Rao told reporters here on Wednesday that the bank would overhaul its credit portfolio in retail and MSME while the exposure to the agriculture sector was under stress.

"By the second quarter, we expect that the stress on agriculture to taper off," he said.

On capital raising, Rao said that the bank was capitalised after which it was lifted out of PCA by RBI in 2018-19.

"In the current fiscal, the bank was not expecting any capital from the government. We are contemplating to go for an QIP in the second quarter to raise around Rs 1500 crore which would suffice in the short term", he said.

He said that the bank's gross NPA during the quarter stood at 17.43 per cent as compared to 17.55 per cent in the preceding quarter.

The bank's net NPA stood at 5.71 per cent at the end of the first quarter. "Our aim is to keep the net NPA level below six per cent", he said.

Regarding accounts covered under provisions of Insolvency and Bankruptcy Code (IBC), the bank has made additional provision of Rs 749.51 crore as at March 31, 2018, it said.

"However, an amount of Rs 874.62 crore was additionally provided on account of declaration of fraud in loan account in power and steel sector during second quarter of current financial year," the bank said.

Besides, the bank has reported one loan account in the power and steel sector under borrowal fraud category to RBI during the second quarter of the current fiscal involving an amount of Rs 1,774.82 crore outstanding as on June 30, 2019.

"The account was already under NPA category since 2016-17 and provision amount to Rs 1,774.82 crore was held in the account as at June-end. This is a consortium advance of 33 lenders which is near resolution stage under NCLT," the bank said.

NIM (net interest margin) of the bank improved to 2.85 per cent as on June 2019 from 2.58 per cent as on March 2019.

Rao said that the bank would go for rationalisation of branches in phases.