Allahabad Bank has posted a net profit of Rs 234.20 crore for the quarter ended September 30, which is a dip of 52.01% against Rs 488.02 crore during the similar period the previous fiscal. The slide in net profit is mainly due to increase in provisioning towards non performing assets and a decline in net interest income of the bank.
Provisioning for NPA for the bank has increased by 18% to Rs 355 crore while total provisioning has increased by 23% to R568 crore. In the second quarter of the current fiscal it added fresh NPAs to the tune of R1,720 crore, against R521 crore during similar period last year.
?Net profit came down due to higher provisioning for substantial rise in NPAs and diminishing fair value of restructured accounts. Profits also got subdued due to prudential write off of some accounts,? the bank?s chairman and managing director Subhalaxmi Panse said. Gross NPA of the bank increased to 2.95% during the period under review against 1.77% during the similar period the previous fiscal. Net NPA increased to 2.1% during the second quarter of the current fiscal against 0.69% the similar quarter the previous fiscal. According to Panse, the bank is aiming at bringing down its gross NPA to 2% by the end of the current fiscal.
Net interest margin of the bank was at 2.80% during the second quarter of 2011-12 against 3.68% for the similar period the previous fiscal.
The bank has off loaded bulk deposits to the tune of Rs 12,150 crore already. ?Due to market scenario, we have reduced our base rate. Both have impacted NII. Our credit portfolio has seen an increase of 14%, so there is a deep decline in NIM with both combined efforts,? Panse said.
Total income of the bank has, however, increased by 9% to R4,582.64 crore during the quarter under review against R4,202.54 crore during the similar quarter the previous fiscal.
The bank?s operating profit was also hit owing to lower yield on advances and higher cost of deposits. Yield on advances came down to 11.53% during the second quarter of the current fiscal from 12.56% in the similar period last fiscal. Cost of deposits increased marginally to 7.56% during the period under review against 7.12% for the similar period last fiscal.
Meanwhile, the bank has applied to the government for a capital infusion of R1,500 crore. Its CAR stood at 12.16% as on September 30, 2012 lower than 12.94% as on June 30, 2012 and 12.99% as on September 30, 2011.
