On the back of a 50 per cent fall in treasury income, state-run Allahabad Bank has reported a 6.5 per cent fall in net profit to Rs 345. 36 crore for the third quarter of the current financial year against Rs 369.46 crore reported in the same period last year.
The profit from investment trading was down 54 per cent at Rs 133.27 crore against Rs 288.27 crore in the same period last year. Its non-interest income fell 17 per cent to Rs 339 crore against Rs 408 crore.
The total provisioning in the quarter was Rs 304 crore against Rs 296 crore in the comparable quarter last year. Its NPA provisioning increased to Rs 110 crore from Rs 70 crore in the same period last year.
Attributing the fall in profit to the reduction in treasury profit, JP Dua, chairman and managing director of the bank, said, “Last year, investment opportunities were available. However, we have tried to reshuffle our portfolio. On a sequential basis, there has been a growth in profit.”
The net interest margin (NIM) in the quarter was 2.97 per cent against 3.24 per cent last year.
The bank has been shedding bulk deposits with such deposits at Rs 1,106 crore out of the total deposit of Rs 94,000 crore.
“Our yield on advances has come down over the last year. The prime lending rate last year was 14 per cent, and it is close to 12 per cent this year. We could not reprice some of our retail deposits, which is the reason that NIM is lower,” said D Sarkar, executive director, Allahabad Bank.
The net interest income in the quarter was Rs 675 crore against Rs 604 crore last year.
The gross non performing assets (NPAs) of the bank stood at 1.77 per cent (1.93 per cent) and net NPAs at 0.35 per cent (0.82 per cent) in the third quarter the current financial year.
The capital adequacy ratio of the bank improved to 15 per cent in the third quarter against 12.20 per cent in the corresponding quarter of the last financial year and 14.90 per cent in the second quarter of the current financial year.
The total income of the bank increased to Rs 2,447 crore in the period against Rs 2,306 crore last year, up 6.11 per cent.
The cost of deposits decreased to 5.96 per cent in the third quarter from 6.96 per cent in the same period last year. On the other hand, the yield on advances came down to 10.54 per cent from 11.31 per cent in the same period last year.
The bank had posted an eight-fold jump in net profit at Rs 333 crore for the quarter ended September 30, 2009, on a year-on-year basis, mainly on account of treasury gains.
(BS)
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