Allahabad Bank reported a 4.6%
increase in net profit to Rs 325 Cr for the quarter ending December 2013,
compared to the same period last year. While net interest margin (NIM) remained
flat at 2.75%, a 59% jump in ‘other income’ at Rs 542 Cr, due to “recoveries in
written-off accounts”, contributed to profit growth. During the quarter, NPAs
worth Rs 389 Cr were sold to asset reconstruction companies. According to the
bank’s CMD Shubhalakshmi Panse, profits were subdued on account of higher
provisioning for NPAs, possible wage revision and mark-to-market losses.
Provisions and contingencies rose 29% to Rs 557 Cr. The provision coverage ratio
was 42.93%. During the period, gross NPAs rose 256 bps to 5.47% (from 2.91%) of
total advances. Net NPAs stood at 4.19%. In absolute terms, gross NPAs jumped
113% on a yearly basis to Rs 7,512 Cr, while net NPAs rose 128% to Rs 5,651 Cr.
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