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Allahabad Bank net leaps 110%

Calcutta, Oct. 15: Allahabad Bank today unveiled a 110 per cent growth in its net profit for the quarter ended September 30. For the first half of the financial year, its net profit of Rs 143.87 crore was 123 per cent higher than 2002-03.

The bank posted a net profit of Rs 75.90 crore in the quarter, much of which came from trading in government securities. The bank earned close to Rs 200 crore from trading and earned Rs 639.21 crore from interest on its investments in gilts.

The earning per share for the second quarter was Rs 2.19, and Rs 4.15 for the first half. Full year earnings for 2002-03 was Rs 5.23.

Executive director K. K. Rai said the bank was sitting on a “hidden reserve” of Rs 1,500 crore. He meant if the bank sold its entire holding in government securities now, it would have made a profit of Rs 1,500 crore. “We can absorb up to 2.5 per cent increase in interest rates without any capital loss,” he added.

Income from banking business has declined marginally during the first half despite increase in lending. The bank’s Rs 1,308-crore income from its core business in the first half was marginally lower than last year. The bank’s net advances have increased 4.5 per cent over the last six months to Rs 13,110.11 crore. Allahabad Bank expects its net advances to grow to Rs 15,500 crore by the end of 2003-04.

Allahabad Bank’s net non-performing assets have declined to 5.21 per cent at the end of the first half as against 7.08 per cent at the beginning of the year. The bank is targeting a recovery of Rs 500 crore during the year.

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