Gilts Subsidiary To Be Set Up Soon

Allahabad Bank will soon set up a gilts subsidiary and submit an application to the Reserve Bank of India for primary dealership. Harbhajan Singh, chairman and managing director of Allahabad Bank said since there was no primary dealer from the eastern region, the bank will take the leadership.

However, Singh said, the setting up and successful functioning of the gilts subsidiary depended on whether the personnel of the Bank acquired the necessary skills to deal in gilts.

It also plans to spruce up service in the industrial finance branches (IFB) by revamping the administrative set-up. These branches will report directly to the head office, thus reducing time in credit disbursals and other transactions.

 

The bank has marked-to-market 50 per cent of its securities in fiscal 1996-97. Other income of the bank has risen from Rs 148.94 crore to Rs 180.97 crore in fiscal 1996-97, while total income also rose from Rs 1,242.31 crore to Rs 1,459.18 crore.

Total interest received on investments and advances went up from Rs 1,093.37 crore to Rs 1,278.21 crore. Interest paid out on deposits also rose from Rs 799.91 crore to Rs 851.72 crore. Borrowing cost of the bank dropped from Rs 61.78 crore in 1995-96 to Rs 24.98 crore, while total interest paid out rose from Rs 761.69 crore to Rs 876.70 crore.

Spread of the bank (difference between interest paid and interest collected) increased from Rs 331.68 crore to Rs 401.51 crore while total expenses climbed from Rs 1,139.10 crore to Rs 1274.92 crore.

Yield on investments climbed from 10.22 per cent to 10.79 per cent and yield on advances rose from 12.58 per cent to 13.41 per cent. Yield on funds went up from 10.76 per cent to 11.14 per cent while cost of deposits went up too from 7.53 per cent to 8.11 per cent.

The ratio of spread to average working funds went up from 3.05 per cent to 3.21 per cent while the average yield on working funds rose from 10.04 per cent to 10.22 per cent.