Allahabad Bank today reported a 1.21 per cent increase in its third quarter net profit to Rs 369.47 crore as against Rs 365.05 crore during October-December 2007 due to higher provisions for tax and wages.
The public sector bank’s total income rose 17.89 per cent to Rs 2,306.45 crore during the quarter compared with Rs 1,956.41 crore in the corresponding period last year. Interest income was 21.96 per cent higher at Rs 1,898.04 crore during the quarter ended December 2008.
While operating profit rose by 27.81 per cent to Rs 666.06 crore, the impact of high tax and employee-related provisions affected Allahabad Bank’s net profit. The bank set aside Rs 193.61 crore to meet its income tax liability for the quarter as against Rs 31.06 crore during the third quarter of 2007-08.
Similarly, provisions for payment to employees went up by 27.77 per cent to Rs 230.03 crore from Rs 180.03 crore in the year-ago period. Of this, Rs 45 crore was an ad-hoc provision to cover the liabilities arising due to the wage negotiations.
The other provisions, including those for bad debt and standard assets, fell 17.62 per cent to Rs 102.98 crore in the third quarter as against Rs 125 crore. Provisions for NPAs were Rs 70 crore.
Allahabad Bank CMD K R Kamath said that the bottom line was also affected due to the transfer of securities from available-for-sale (AFS) securities to the held-to-maturity (HTM) category during the last nine months. “However, whatever has been transferred has appreciated in the HTM portfolio (which is yet to be realised),” Kamath said.
NIM improved to 3.24 per cent in December 2008 from 2.59 per cent in the year-ago period.
