Allahabad Bank revamps AllBank Finance

AllBank Finance — the 100 per cent subsidiary of Allahabad Bank that has been barely functional since 2005 — is now on a revamp spree. Hit by falling revenues and profits, that almost halved last fiscal, the company's board has been reconstituted and AllBank Finance plans to focus on new segments to drive its revenues.

The board — reconstituted by Allahabad Bank two months ago — will have four members from the bank, said Mr J. P. Dua, Chairman and Managing Director of the bank. “Mr Dua will be the chairman of the Board, while Mr D. Sarkar, executive director, and Mr A. B. Bhattacharjee and Mr Narang, both general managers, will be the directors on the board,” Mr Dua said.

This apart, the board will have three independent directors — Mr Vinod Kothari, a chartered accountant and company secretary; Mr Subir Das and Mr Emron Samuel, both chartered accountants. Allahabad Bank has also selected Mr M. Satpathy as the vice-president and Chief Executive Officer of the company.

Under the new management, the company plans to venture into such new areas as trustee and custodial services and carry out techno-economic viability study of projects to improve earnings; besides raising debts, doing syndication of loans and distributing mutual funds.

Incorporated in 1951 as “Allahabad Bank Nominees Limited”, the company subsequently changed its name to “AllBank Finance Limited” in 1991.It has, however, remained dormant since 2005, Mr Dua said.

Hardening interest rates, tight liquidity and rising inflation pulled down AllBank Finance's revenues and profits, the company said in its annual report 2010-11. The company reported a 46 per cent drop in revenue, at Rs 5.80 crore, and 61 per cent decline in net profit to Rs 2.80 crore for the year ended March 31, 2011.

“Despite having adequate capital, the company has not been doing well due to the lack of focus. Our main aim now is to revive the focus,” Mr Dua said. The company — which has two branches, one each in Kolkata and Mumbai — plans to open one in Delhi by end January and another one, either in Bangalore or Chennai, by March.