Allahabad Bank on Thursday said its net profit for the third quarter fell 44.5 per cent from a year earlier to Rs 310.83 crore on account of higher provisions and lower net interest income.
Net interest income was at Rs 1,330 crore, down 3.7 per cent year-on-year. Net interest margin also narrowed 71 basis points from a year ago to 3.02 per cent. “Our net profit declined from a year ago due to higher provisions. The increase in provisions was on account of addition of non-performing assets. According to new norms we had to provide more for restructured advances. We also made provisions in anticipation of wage increases,” Shubhalakshmi Panse, chairperson and managing director said.
The bank made provisions of Rs 343 crore for bad loans and another Rs 132 crore for restructured advances. It also set aside Rs 115 crore in anticipation of 5.5 per cent increase in wages.
Gross non-performing asset ratio deteriorated by 105 basis points from a year ago to 2.91 per cent, while net bad loan ratio increased by 127 basis points to 2.06 per cent. Provision coverage ratio was at 60.97 per cent at the end of last quarter.
Panse said the bank has stepped up its recoveries and witnessed improvement in asset quality on a sequential basis. The restructured loan portfolio was at Rs 13,070 crore.
Gross advances grew by 19.6 per cent year-on-year to Rs 121,555 crore. Deposits were up 17.5 per cent from a year ago at Rs 170,649 crore.
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Allahabad Bank closed the quarter with a capital adequacy ratio of 11.96 per cent. The bank has requested the government for additional capital of Rs 1,500 crore.
Shares of the bank on Thursday ended at Rs 163.20 on the National Stock Exchange (NSE), down 2.3 per cent from previous close.