The Hindu Business Line : Allahabad Bank’s net profit slips 53%

Kolkata, July 18 Allahabad Bank’s net profit dropped by almost 53 per cent to Rs 93.36 crore for the quarter ended June 30, 2008, down from Rs 200.40 crore in the corresponding quarter of last year.

The drop was mainly on account of provisioning made for Rs 264.08 crore owing to the increase in yield of government securities (G-sec), according to Mr K.K. Agarwal, Executive Director of the bank.

“The yield on G-secs has moved up due to inflation and various other factors. The bank has to therefore provide depreciation of Rs 264.08 crore,” he said, speaking to newspersons while declaring the bank’s quarterly results, here on Friday.

The total investment portfolio of the bank was at Rs 24,974 crore. Fifty eight per cent of the total investment portfolio was in the Held-to-Maturity category while the rest was in Available for Sale category, he said.

Total income increased by 20.48 per cent at Rs 1,849.63 crore (Rs 1,535.10 crore). The total business stood at Rs 1, 23,451 crore, up from Rs 1,03, 378 crore.

Deposits grew by 16.53 per cent at Rs 73,207 crore while advances went up by 23.87 per cent at Rs 50,244 crore. The net interest margin was at 2.75 per cent and the bank plans to maintain it at those levels. Net non-performing asset was at 0.75 per cent (0.76 per cent).

Raising Capital

Allahabad Bank does not have any immediate plans of raising capital. “We have the Board’s approval to raise Rs 300 crore but we will wait for the markets to stabilise before raising the money,” said Mr Agarwal. According to him, the bank was adequately capitalised at 11.68 per cent. It was awaiting government approval for rights issue, he said.

“We have headroom to raise Rs 2,076 crore by way of Tier II bonds and Rs 662 crore worth perpetual bonds,” he said.

Branching Out

The bank plans to open a branch in Bangladesh and convert its representative office in China into a full-fledged branch. On the domestic front, it has received Reserve Bank of India’s approval to open 113 branches this year. It has also applied to RBI for 180 more branches.

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Allahabad Bank Q3 net up at Rs 286 cr

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