Allahabad Bank's net profit tanks 68% to Rs 126 cr

Bank's net NPAs increased to 3.19% at the end of March 2013, against 0.98% at the end of March 2012

State-run Allahabad Bank has reported a 68.48 per cent drop in net profit in the fourth quarter of FY13 to Rs 126.15 crore against Rs 400 crore in the year-ago period.

The fall was on account of higher accretion of non performing assets (NPA) and restructuring, according to Shubhalakshmi Panse, chairman and managing director, Allahabad Bank. This apart, wage revision and pension liabilities also led to a slide in profit.

After the announcement of the results, the bank’s scrip fell over 5 per cent on the Bombay Stock Exchange and at the end of trading hours, settled at Rs 126.50.

The bank’s net NPAs increased to 3.19 per cent at the end of March 2013, against 0.98 per cent at the end of March 2012.

Gross non-performing assets (NPAs), as a proportion of advances, increased to 3.92 per cent at the end of March 2013, against 1.83 per cent in the previous financial year.

The net interest margin (NIM) was down to 2.30 per cent in the last quarter, compared with 3.23 per cent in the year-ago period.

NIM for FY13 was 2.81 per cent against 3.48 per cent in FY12.

The bank aims to bring down the gross NPA to 3.50 or 3.30 per cent in FY14. According to Panse, iron and steel, textiles and food processing largely figured in the NPAs for the bank. “Sectors like SME also had some categorical exposure. Many companies are on the verge of having a credit restructuring done and some have already applied for it. Hopefully, these companies will be performing well next year, which will reflect on our accounts,” she said.

The net profit for FY13 was Rs 1,185.21 crore against Rs 1,866.78 crore in FY12. Allahabad Bank is fully compliant with the Basel-III norms, said Panse.

The total income rose to Rs 4,776.90 crore in the final quarter, compared with Rs 4,523.38 crore in the same period of the previous financial year.