AllBank will meet Rs 600 cr profit target, says chief

Allahabad Bank will meet its budgeted net profit figure of Rs 600 crore for the year ended March 2005, said the bank's chairman.

"We will achieve our budgeted numbers of a net profit of Rs 600 crore and operating profit of Rs 1,100 crore," said O N Singh, chairman & managing director of the Kolkata-based, Allahabad Bank at the sidelines of a press conference held here today to announce its second public issue.

This would be 23 per cent higher than the previous year's net profit of Rs 486 crore. The bank posted a net profit of Rs 462.5 crore for the first nine months of this fiscal.

Allahabad Bank has registered over 30 per cent credit growth on a year-on-year basis with maximum growth coming from the retail and agriculture sectors. The credit-deposit ratio stood at 55 per cent.

Post the public issue, which is aimed to augment the bank's capital adequacy ratio (CAR), the CAR will inch up from 12 per cent to 15.5 per cent. "The implementation of the stringent Basel II norms will wipe off 2.5 per cent of our capital adequacy," said Singh.

Allahabad Bank has evinced interest in establishing business synergies with banks that have a presence in South India. "We are strong in the eastern, northern and central India. We are interested in business synergies with other players and are talking to some banks," he said.

On the technology front, the bank has shortlisted three software vendors ""Infosys, IBM and Tata Consultancy Services"" for implementation of a core banking system. Allahabad Bank plans to spend Rs 300 crore over 3 years towards technology.

"We plan to put 400 branches on the core banking system. The work on it will start as soon as we give the software contract. We also want to increase our ATM network from 100 to 350," said Singh.