Fee-based income, core biz lift Allahabad Bank net 35% in Q3

Allahabad Bank is hopeful of receiving Rs 1,000 crore capital infusion from the Central Government under the recapitalisation scheme by the end of this fiscal. The fund infusion would be done primarily through the equity route, said Mr D. Sarkar, Executive Director, Allahabad Bank.

The bank's capital-adequacy ratio stood at 12.75 per cent as on December 31, 2011.

“We had asked for Rs 1,000 crore from the Government and we are hopeful of getting the funds within the next one week. The infusion will be through direct equity,” Mr Sarkar said. The bank's Tier I capital was at 8.91 per cent as on December 2011.

The bank also has headroom to raise Rs 4,700 crore; however, it may not go for further capital infusion this fiscal.

Meanwhile, riding on the back of higher fee-based income and growth in core operations, bank posted 35 per cent growth in net profit at Rs 560 crore for the quarter ended December 31, 2011, compared with the same period last year.

‘Other income' rose 35 per cent to Rs 348 crore. Shares of Allahabad Bank dipped by 0.76 per cent to close at Rs 155.80 on the BSE on Monday.

“Moving forward, our thrust will be on growing our business, bottom-line and garnering fee-based income.

“With these strategies we hope to sustain our profitability,” said Mr J. P. Dua, the bank's Chairman and Managing Director.

The net interest margin improved to 3.73 per cent (3.44 per cent). The bank is hopeful of maintaining NIM at over 3.5 per cent by the end of this fiscal.

Interest rate cut?

Replying to a query on the possibility of an interest rate cut, Mr Dua said, “I do not think that the time for that (cut in interest rate) has come yet.”

The percentage of net non-performing assets to advances increased to 0.79 per cent (0.59 per cent). Provisions increased by 26 per cent to Rs 470 crore.

shobha@thehindu.co.in