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Our Bureau

Kolkata , May 3

WITHIN two years of its maiden public issue, Allahabad Bank proposes to enter into the capital market again with an offer of equities some time in the third quarter of the current fiscal.

The size of the issue will be Rs 100 crore.

"Unlike the maiden issue which was offered at par, suitable premium will be charged this time," Mr O.N. Singh, CMD of Allahabad Bank, said here on Monday.

Allahabad Bank, it might be recalled, came out with a maiden public issue of Rs 100 crore in October 2002.

Mr Singh, however, declined to comment on whether the forthcoming issue would be offered only on rights basis. "It is being discussed", he said, adding, "The premium amount is still to be finalised." Following the proposed issue, the government equity holding in the bank would be reduced to a little over 50 per cent from the present 71 per cent, he said. The present equity size was Rs 346 crore.

Right now, 50 per cent of the bank's total capital was now accounted for by the Tier I type. "The capital adequacy ratio being 12 per cent, the Tier I accounted for 6 per cent and the desire of the board of directors is to have it stepped up to 8.5 to nine per cent within this year," he said.

Earlier, briefing newspersons about the bank's performance in 2003-04, the CMD said the net profit at Rs 463 crore (Rs 165.99 crore in 2002-03) showed a jump of 179.16 per cent and operating profit at Rs 876.25 crore ( Rs 515. 83 crore) a growth of 69.87 per cent. The increase in operating profit, amounting to Rs 361 crore, was contributed by core business (Rs 193 crore) and the sale of securities (Rs 168 crore).

The highlights of the performance placed the dividend payment and the provisions for dividend at Rs 78.22 crore as compared to Rs 39.11 crore (10 per cent) in 2002-03.

He, however, declined to say the percentage of dividend citing "technical reasons". "We have sought the Reserve Bank of India's permission to declare the dividend in percentage," he said. In 2003-04, the bank declared an interim dividend of 10 per cent.

During the year under review, the bank's total business increased by Rs 8914 crore (22.89 per cent) to Rs 47,864 crore, as compared to 14.66 per cent (Rs 4,979 crore) in 2002-03, net NPAs reduced to 2.37 per cent (7.08 per cent), return on assets improved to 1.34 per cent (0.59 per cent), provision coverage ratio to 73.75 per cent (51.23 per cent), net interest margin to 3.39 per cent (2.94 per cent), capital adequacy to 12.52 per cent (11.15 per cent), cost of deposits dropped to 5.63 per cent (6.79 per cent), operating expenses to average working funds to 2.44 per cent (2.6 per cent) and investment fluctuation reserve to 3 per cent.

A sum of Rs 535 crore was under corporate debt restructuring, of which the standard assets accounted for Rs 428 crore and the balance sub-standard assets. About Rs 123 crore was locked in Haldia Petrochemicals Ltd.

During the year under review, the cash recovery from the NPAs amounted to Rs 360 crore and by way of upgradation another Rs 89.75 crore. An additional Rs 105 crore was recovered from the written off debts. Over Rs 480 crore were prudential write off.

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