Allahabad Bank Q1 net up 23% as core biz, recoveries improve

Backed by growth in core operations and improved recovery, Allahabad Bank posted a 23 per cent rise in net profit during the first quarter of this fiscal.

Net interest income grew 11 per cent to Rs 1,306 crore.

The bank recovered Rs 402 crore during the quarter, which included Rs 120 crore worth fresh recovery, Rs 113 crore from upgradation and another Rs 169 crore from written-off accounts.

Net interest margin (NIM) declined to 3.17 per cent (3.40 per cent). According to the bank’s chairman and managing director, Mr J. P. Dua, the bank is hopeful of sustaining its NIM at over three per cent this fiscal.

Restructured assets

During the April-June 2012 quarter, the bank restructured assets worth Rs 4,770 crore. Restructuring of debts worth Rs 3,100 crore of State electricity boards of Uttar Pradesh, Haryana and Rajasthan, together accounted for almost 65 per cent of the total restructuring.

“Restructuring was also done in the textiles and pharmaceuticals sectors,” Mr Dua said.

Slippages

Slippages, primarily contributed by the agriculture and SME sectors, stood at Rs 590 crore during the quarter.

The percentage of gross non-performing assets (NPAs) to advances increased to 1.96 (1.62), while net NPA was at 1.09 per cent (0.60 per cent).

Growth target

The bank aims to achieve 20-22 per cent growth in business this year. Agriculture, retail and small and medium enterprises will be the thrust areas, Mr Dua said.

The bank’s shares closed at Rs 136.70, up by 5.97 per cent, on the BSE on Monday.

shobha.roy@thehindu.co.in