Allahabad Bank net rises 21 per cent to Rs 488 crore

KOLKATA: Allahabad Bank has reported a 21% rise in both net and operating profit for the September quarter and contained non-performing ratios at the previous level amid concerns over asset quality and moderating economic growth.

Its net profit grew to Rs 488 crore in the quarter compared with Rs 403 crore in the corresponding period in 2010, despite making 22% more provisioning at Rs 461 crore. Its operating profit rose to Rs 949 crore (Rs 782 crore) on a total income of Rs 4,203 crore, which grew 41% over Rs 2,982 crore in second quarter last fiscal.

The bank’s net interest margin, or NIM, for the quarter improved to 3.68% from 3.34% a year ago. Yet, abank executive said the bank will be happy to keep NIM around 3% as RBI wants banks to do more social banking, which is unremunerative.

“The profits have come from core operation. Treasury has contributed just about Rs 7 crore,” chairman & MD JP Dua said on Wednesday. Though the bank has reported fresh slippages of Rs 521 crore (Rs 453 crore) in the threemonth period, it managed to keep gross NPA ratio unchanged at 1.77% as on September 30, 2011, while there was marginal deterioration in net NPA ratio to 0.69% from 0.56% a year ago.

Executive director D Sarkar said the strategy to grow advances selectively and stress on monitoring of loans have paid off. The bank’s deposit grew 25%, more that the advances growth of 16.4%, keeping surplus funds for higher lending in the busy credit season.

Dua said the bank kept itself liquid and well-capitalised to grow advances in the next two quarters but the moderating economic growth is a concern. “We are part of the economy, so a moderation in growth may impact us, but the fact is that we have been growing more than the industry average,” he said.