Higher provisioning for accounts referred to the National Company Law Tribunal (NCLT) and the recent RBI guidelines on restructured accounts and ageing non-performing assets dragged down the profitability of Allahabad Bank.

The Kolkata-based bank posted a net loss of ₹1,944 crore for the quarter ended June 30, 2018, compared to a net profit of ₹29 crore in the same period last year. However, on a sequential basis, losses narrowed from ₹3,510 crore for the quarter ended March 31, 2018.

Total provisioning during the quarter grew by a whopping 107 per cent to ₹2,763 crore (₹1,335 crore); of this, provisioning for NPA increased to ₹2,590 crore (₹1,687 crore).

As per the revised guidelines of the RBI, the bank had made a provision of ₹656 crore during the quarter ended March 31, 2018. During the current quarter, it made a further provision of ₹658 crore in the said accounts, the bank said in an explanatory note to the stock exchanges on Tuesday.

In pursuance of RBI guidelines, the bank has spread the provision for fraud/red flagged accounts (RFAs) of ₹1,301 crore in 32 accounts as on June 30, 2018. Further, a provision of ₹229 crore has been reversed in ‘Other Reserves’, out of ₹390 crore, related to accounts declared ‘fraud’ in FY18.

Provision coverage ratio during the period under review improved to 67.81 per cent against 52.49 per cent in the same period last year.

Gross, net NPAs

The share of gross NPA increased to ₹25,068 crore (₹21,032 crore), while net NPAs came down to ₹10,410 crore (₹12,869 crore). The percentage of gross NPA inched up to 15.97 per cent (13.85 per cent), while net NPAs came down to 7.32 per cent (8.96 per cent).

The bank witnessed a 37 per cent growth in net interest income to ₹1,703 crore (₹1,243 crore). Other income dropped by 76 per cent to ₹195 crore (₹821 crore). Net interest margin improved to 3.18 per cent (2.35 per cent).

Related Topics
comment COMMENT NOW