Allahabad Bank net profit up 8% in Q2

Kolkata, Nov 10 :  State-run Allahabad Bank on Friday reported close to 8 per cent growth in its net profit to Rs 70.20 crore for the quarter ended September 30, as compared to Rs 65.03 crore for the year-ago period.

The bank said that in order to boost its capital adequacy, it may raise around Rs 1,000 crore through QIP issue within the current fiscal. At the end of the second quarter, its capital adequacy ratio as per Basel III norms stood at 11.74 per cent.

The growth in bank's net profit for the second quarter of the current fiscal was aided by a healthy growth in operating profit along with fall in the bank cost of deposits.

Operating profit surged by 26.03 per cent year-on-year to Rs 1,223 crore in the second quarter of the current fiscal as compared to Rs 970 crore in the year-ago period, while cost of deposit reduced to 5.46 per cent in the quarter under review, as against 6.02 per cent in the same quarter last year.

The bank's asset quality, however, deteriorated as the amount of gross non-performing asset (NPA) rose to Rs 21,454.27 crore during the period under review, up by 12.4 per cent year-on-year from Rs 19,094.53 crore in the same quarter last fiscal, according to a regulatory filing.

"We are focusing on recovery of bad loans. During the quarter, fresh slippage to NPA category was around Rs 2,000 crore," the bank's Managing Director and CEO Usha Ananthasubramanian told reporters here.

According to another bank official, apart from the Reserve Bank of India's mentioned accounts, the bank itself has identified 20 accounts for referring to the National Company Law Tribunal for corporate insolvency resolution.

In these 20 accounts, it has a total exposure of around Rs 908 crore, he added.

The bank's gross NPA as a percentage of total loans rose to 14.10 per cent in the September quarter this fiscal from 12.28 per cent during the same period last fiscal. Its NPA provisions during the quarter grew over 112 per cent year-on-year at Rs 1,469.52 crore compared to Rs. 692.08 crore for the corresponding quarter a year ago.

It has exposure to 10 of the 12 large stressed accounts, which have been mentioned in the first list of the Reserve Bank of India (RBI), with its overall exposure being around Rs 4,429 crore. Further, the bank has exposure to as many as 13 of the 29 firms, identified by the RBI to be resolved through any of its schemes before December 13, failing which cases should be filed against these firms under IBC (Insolvency and BankruptcyACode) at the NCLT before December 31.