Allahabad Bank Q3 net profit rises by 28%

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CORPORATE SCORECARD

BS Reporter / Kolkata January 17, 2008

Riding on robust interest income, Allahabad Bank has reported a 27.58 per cent rise in net profit at Rs 365.05 crore for the quarter ended December 31, 2007 as compared with Rs 286.13 in the corresponding quarter last financial year.

The operating profit grew 59.83 per cent to Rs 521.12 crore as against Rs 326.04 crore in FY07.

Total revenue increased 19.53 per cent to Rs 1,13,835 crore from Rs 95,237 crore. This includes deposits, which increased 20.38 per cent to Rs 68,044 crore from Rs 56,523 crore, and advances, which rose 18.28 per cent from Rs 38,714 crore to Rs 45,791 crore.

BIG PICTURE
(Rs crore)	Quarter ended December
(Rs crore)	2006	2007	% chg
Interest earned	1304.96	1583.49	21.34
Other income	125.49	372.92	197.17
Expenditure	1104.40	1435.29	29.96
PBT	326.04	521.12	59.83
Net profit	286.13	365.05	27.58
CAR (%)	12.80	12.84
NP (%)	21.93	23.05

Chairman and Managing Director A C Mahajan attributed the performance to the interest income which registered a growth of 30.66 per cent to Rs 4,560 crore from Rs 3,489 crore registered in the FY07 quarter.

“I believe we would reach around Rs 52,000 crore in terms of credit disbursement by financial year-end,” he added.

During the quarter under review, the net non-performing assets (NPA) of the bank decreased to 0.67 per cent (Rs 303.84 crore) as against 0.72 per cent (Rs 273.01 crore) reported a year ago. The net interest margin (NIM) stood at 2.90 per cent during the quarter. Commenting on the interest rate, Mahajan said, “We will wait for the regulator to give some hint, before taking the next decision on the issue.”

The Kolkata-based bank is also planning to raise Rs 300 crore through tier I perpetual bonds on private placement basis in the fourth quarter to maintain the capital adequacy ratio at 13 per cent, which presently stands at 12.84 per cent.

This is for the first time the bank is planning to raise capital through this route. In September 2007, the bank had raised Rs 500 crore through tier II subordinate debt.

“I have told my treasury to raise tier I perpetual bonds, whenever the market conditions are appropriate. They will decide the quantum and timing of the bonds. But, at the moment, I have no plans to raise capital through pure equity,” said Mahajan.

Regarding the proposed insurance business, he said,”The board is meeting on January 22 to take a call on the issue. However, in all probability, it will be launched on 11 February 2008. We are yet to take a final call regarding the type of products which we are going to launch. That should be discussed when the board meets,”

The general insurance business would be a joint venture, in which Japanese insurance major Sompo will hold 26 per cent stake, Allahabad Bank 30 per cent, Indian Overseas Bank 19 per cent, Karnataka Bank 15 per cent, while Dabur, the non-banking partner, will get 10 per cent.


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