Backed by higher fee-based income and growth in core operations, Kolkata-based Allahabad Bank posted a 35 per cent growth in net profit at Rs 560 crore for the quarter ended December 31, 2011, against Rs 415.80 crore in the same period last year. The other income of the bank rose 35 per cent to Rs 348 crore in the last quarter, against Rs 257 crore in the same period last year.
The net interest margin improved to 3.73 per cent in the last quarter, against 3.44 per cent in the same period last year. The provisions in the last quarter increased about 26 per cent to Rs 469 crore in the last quarter, against Rs 372 crore in the same period last year.
Major provision was on account of non-performing assets at Rs 305 crore, against Rs 175 crore in the same period last year. Net non-performing assets to net advances rose 0.79 per cent in the last quarter, against 0.59 per cent in the same period last year.
The gross NPA to gross advances of the bank in the last quarter was 1.86 per cent, against 1.77 per cent in the same period last year.
“Moving forward, our thrust would be on growing our business, bottomline and garnering fee based income. With these strategies we hope to sustain our profitability,” said J P Dua, chairman and managing director, Allahabad Bank.
Meanwhile, the bank is hopeful of receiving Rs 1,000 crore worth capital infusion from the government under its recapitalisation scheme by the end of this fiscal. The fund infusion would be done primarily through the equity route, said D Sarkar, executive director, Allahabad Bank.
The bank’s capital adequacy ratio stood at 12.75 per cent as on December 31, 2011.
“We had asked for Rs 1,000 crore from the government and we are hopeful of getting the funds within the next one week. The infusion will be through direct equity,” Sarkar said. The bank’s Tier I capital was 8.91 per cent as on December 2011.
The bank also has headroom to raise Rs 4,700 crore, however, it might not go for further capital infusion this fiscal.
Shares of Allahabad Bank dipped by 0.76 per cent to close at Rs 155.80 on the BSE on Monday.
Replying to a query on the possibility of an interest rate cut, Dua said, “I do not think that the time for that (cut in interest rate) has come yet.”
