Allahabad Bank nets Rs 29 crore profit in Q1 on treasury gains, lower provisions

State-run Allahabad Bank reported Rs 29 crore net profit for the first quarter riding on steady rise in treasury income and commission earned as well as on lower provision.

This is the second straight quarterly profit for the bank after a lackluster last fiscal. It had reported Rs 565 crore loss in the year ago period while made net profit of Rs 111 crore in the fourth quarter.

"Good news is that slippages have been contained," bank's Managing Director Usha Ananthasubramanian said.

She said the other strong points for the bank are 21% rise in operating profit at Rs 1170 crore for the quarter and rising savings bank deposits helping cost of deposits fall 76 basis points year-on-year.

The bank's current and savings bank account ratio is at a healthy 45%. "Our target is 50%... it's an aggressive target but possible," the MD said.

Fresh slippages during the quarter were Rs 2004 crore while reduction in non-performing assets was Rs 1900 crore.

The bank's sticky loan ratio rose to 13.85% at the end of June quarter from 12.33% a year ago but a Rs 130 crore right back of provision related to a single account and Rs 108 crore depreciation on investment helped the bank to make lower provision at Rs 1142 crore compared with Rs 1532 crore in the year ago period.

Other income from treasury and commission grew 49% at Rs 821 crore.

The bank’s stock price fell 1.37% to Rs 64.85 crore Friday on BSE.

The Kolkata-based lender may raise Rs 500 crore in this quarter to support business growth. Its board has approved to raise Rs 2000 crore this fiscal.

The bank is currently working on the fund raising plan and the timing of it would depend on market condition.

Its capital adequacy ratio under Basel III stood at 11.61% at the end of June quarter.