Backed by robust growth in treasury income, Allahabad Bank posted an eight-fold rise in net profit to Rs 333.59 crore for the quarter ended September 2009 as against Rs 41.60 crore in the corresponding quarter a year ago.
The bank’s non-interest income was Rs 404.83 crore as against Rs 131.23 crore in the same period of the previous financial year, a growth of 208.49 per cent. The net interest income rose 22.23 per cent to Rs 603 crore.
“The growth was driven by core operations as well as a treasury income of Rs 168 crore. We have set a target of maintaining a net interest margin (NIM) of 2.75 per cent for the entire year, though our endeavour will be to maintain it at 2.88 per cent as we have already reached that level,” said Chairman and Managing Director KR Kamath.
The bank’s NIM for the quarter stood at 2.84 per cent as against 3 per cent for the quarter ended June 2009 and 2.70 for the quarter ended September 2008.
Profit from investment trading stood at Rs 168.28 crore as against Rs 7.68 crore in the same period of the previous year. Mutual fund investments accounted for Rs 122 crore of this.
“There is excess liquidity in the system. If this continues, we may see deposit rates fall by 25 basis points,” said Kamath. The cost of deposits had fallen to 6.30 per cent compared to 6.90 per cent a year ago, he added.
The gross non-performing assets (NPAs) of the bank stood at 1.78 per cent as against 1.93 per cent in the second quarter of the previous financial year. The net NPAs of the bank were 0.35 per cent as against 0.85 per cent during the same period last year.
The total provisioning in the second quarter was Rs 316 crore as against Rs 272 crore in the second quarter of the previous year. Out of this, the NPAs were Rs 170 crore while depreciation on investment was Rs 17 crore.
The capital adequacy ratio of the bank stood at 14.90 per as against 11.46 per cent in the year-ago period.
Total deposits grew 18.55 per cent as against Rs 11.76 per cent in the year-ago period. Gross advances grew 17.66 per cent as against 21.51 per cent in corresponding quarter last year.
The bank has been able to bring down its high-cost deposits from about Rs 12,000 crore in the September quarter of 2008 to about Rs 1,700 crore. Current and savings accounts account for 35 per cent of the total deposits of the bank.
