Allahabad Bank has reported decent results for the quarter ended June 11 with 38% increase in NII at Rs. 1175.55 crore and 20% increase in Net Profit at Rs. 418.13 crore. Despite increase in the cost of funds, the bank has managed to improve NIM to 3.40% in quarter under review against 3.38% a quarter ago and 3.10% a year ago. However, drastic fall in trading profits by 79% and sharp increase in provisions on investments and bad debts has curtailed the growth in PBT to meager 3% at Rs. 569.95 crore. Thank to whooping 10.6% dip in the effective tax rate, Net Profit was up by modest 20% on y-o-y basis. Although the margins improved declining asset quality is a concern for the bank.
Allahabad Bank has increased base rate and BPLR by 25 bps each to 10.25% and 14.50% respectively w.e.f 15 July 11.
Asset Quality:
Quarterly Performance:
For the quarter ended June 11, the bank has reported 38% increase in the NII at Rs.1175.55 crore owing to 48% increase in the Interest earned at Rs. 3549.84 crore and 53% increase in the Interest expended at Rs. 2374.29 crore. Interest on advances increased by 49% to Rs. 2699 crore while that of interest paid on deposit grew by 54% to Rs. 2234 crore. Cost of deposits inched up by 141 bps and that of yield on advances rose up by 126 bps in the quarter under review. On the other hand, spread has increased by 6 bps and pushed NIM up to 3.40% against 3.10% a year ago and 3.38% a quarter ago. Fee based income has inched up by 21.5% to Rs. 207 crore. However trading profit income slipped by 72% to Rs. 26 crore and totaled other income down by 4% to Rs. 285.93 crore. The other income to net total income slipped to 170 bps to 11.9%.
The Employee cost has inch up 34% to Rs. 382.19 crore in quarter under review. The bank has provided provision for pension and gratuity for the quarter at Rs. 37.40 crore being 1/4th of Rs. 149.54 crore. The other operating expenses inched up by 19% to Rs. 189.67 crore, totaling Operating expenses up by 29% to Rs. 571.86 crore. The cost to income ratio has inched up by 50 bps to 39.1% and led Operating Profit up by 26% to Rs. 889.62 crore.
The provisions and contingencies have more than doubled at Rs. 319.67 crore (up by 112%) owing to huge increase in the provisions for bad and doubtful debts and depreciation on Investments. The bank has provided Rs. 112.88 crore on depreciation on investment (Rs 1.95 crore in the corresponding previous year), Bad and Doubtful debts Rs.165.57 crore (Rs 70 crore in the corresponding previous quarter). The provisions on standard advances have also increased to Rs. 45.11 crore (against Rs. 12.65 crore). Resultantly, growth in PBT was curtailed to a lower single digit growth of 3% to Rs. 569.95 crore. However, whooping 1060 bps decline in effective tax rate at 26.6% has led Net Profit up by 20% to Rs. 418.13 crore.
Yearly Performance:
For the year ended March 11, Allahabad bank has reported 18% increase in Net Profit atRs. 1423.11 crore over 52% increase in the NII at Rs. 4022.47 crore. The other income declined by 10% to Rs. 1370.41 crore owing to 72% dip in the trading profits at Rs. 160 crore. The Operating expenses grew by 45% to Rs. 2338.30 crore and paved cost to income ratio by 450 bps to 43.4%. Thus Operating profit grew by 20% to Rs. 3054.58 crore. Finally after accounting 22% increase in provisions and contingencies at Rs. 1631.47 crore, Net profit was up by 18%.
Other Information:
Allahabad Bank has increased base rate and BPLR by 25 bps each to 10.25% and 14.50% respectively w.e.f 15 July 11.
Asset Quality:
- The Gross NPA of the bank has inched up 41% y-o-y and slipped 3% q-o-q to Rs.1604.37 crore for the quarter ended June 11. During the quarter, the bank has cash recovery of Rs. 98.83 crore, up gradation of Rs. 101.90 crore and slippages of Rs.118.24 crore. The % GNPA stood at 1.62% against 1.5% a year ago and 1.74% a quarter ago. Slippage ratio stood at 0.65% at end of June 11 against 0.66% in the corresponding previous year and 2.21% at end of March 11.
- Net NPA has surged up by 90% y-o-y and 20% q-o-q to Rs. 588.59 crore at end of June 11. The % NNPA stood at 0.6% against 0.41% a year ago and 0.79% a quarter ago. Provision coverage ratio increased to 79.90% as on June 11 compared to 75.67% as at end of March 11.
- The outstanding restructured assets at end of June 11 stood at Rs. 3059 crore, of which Rs. 312 crore turned to NPA's.
- Total business of the bank has improved 26% y-o-y and 3% q-o-q to Rs. 232558 crore for the quarter ended June 11.
- Gross Credit has inched up by 30% y-o-y and 4% q-o-q to Rs. 98740 crore at end of June 2011. Market share of the bank in credit has also inched up to 2.39% against 2.23% a quarter ago and 2.14% a year ago. Total disbursements under retail credit increased 25% to Rs. 677 crore. Priority sector Credit grew by 27% to Rs.31404 crore while that of agri credit grew 17% to Rs. 13565 crore. Credit to MSE grew by 60% to Rs. 13666 crore and that of MSME by 55% to Rs. 10498 crore.
- Deposits grew by 1% q-o-q and 24% y-o-y to Rs. 133818 crore at end of June 11. Market share of the bank in deposits stood increased to 2.41% against 2.31% a quarter ago. CASA deposits grew 16% y-o-y and slipped 3% q-o-q to Rs. 42855 crore at end of June 11. Resultantly, CASA ratio slipped to 32.17% against 34.42% a year ago and 33.70% a quarter ago.
- Credit deposit ratio rose to 74.12% at end of June 11 against 70.30% in the corresponding previous year.
- Cost of deposits inched up to 7.01% at end of June 11 against 5.83% at end of March 11 and 5.60% at end of June 10. Yield on advances also inched up to 11.58% against 10.50% at end of March 11 and 10.32% at end of June 10. NIM improved to 3.40% in quarter under review against 3.38% a quarter ago and 3.10% a year ago.
- Capital Adequacy ratio stood at 12.75% with Tier I capital of 8.55% at end of June 11 against 12.96% with Tier I capital of 8.57% at end of March 11. Risk Weighted Assets at end of quarter stood at Rs. 97285 crore. RWA to working funds stood at 62.74% against 60.92% at end of March 11 and 64.05% at end of June 10.
- Investment book has improved by 25% y-o-y and 5% q-o-q to Rs. 45696 crore at end of June 11. The Breakup of the book is HTM Rs. 31532 crore, AFS Rs. 13835 crore and HFT Rs. 328 crore. The total duration of the book is 4.94 years while modified duration 4.94 years. SLR % stood at 29.97% while HTM to SLR is 81.84%. Yield on investment has increased to 7.57% against 7.04% a quarter ago and 6.84% a year ago.
- Business per employee surged to Rs. 11.09 crore at end of June 11 against Rs. 8.83 crore in the corresponding previous year. Business per branch has increased toRs. 11.09 crore against Rs. 8.83 crore in the corresponding previous year.
- The total branches at end of June 11 stood at 2416 against 2415 at end of March 11.
For the quarter ended June 11, the bank has reported 38% increase in the NII at Rs.1175.55 crore owing to 48% increase in the Interest earned at Rs. 3549.84 crore and 53% increase in the Interest expended at Rs. 2374.29 crore. Interest on advances increased by 49% to Rs. 2699 crore while that of interest paid on deposit grew by 54% to Rs. 2234 crore. Cost of deposits inched up by 141 bps and that of yield on advances rose up by 126 bps in the quarter under review. On the other hand, spread has increased by 6 bps and pushed NIM up to 3.40% against 3.10% a year ago and 3.38% a quarter ago. Fee based income has inched up by 21.5% to Rs. 207 crore. However trading profit income slipped by 72% to Rs. 26 crore and totaled other income down by 4% to Rs. 285.93 crore. The other income to net total income slipped to 170 bps to 11.9%.
The Employee cost has inch up 34% to Rs. 382.19 crore in quarter under review. The bank has provided provision for pension and gratuity for the quarter at Rs. 37.40 crore being 1/4th of Rs. 149.54 crore. The other operating expenses inched up by 19% to Rs. 189.67 crore, totaling Operating expenses up by 29% to Rs. 571.86 crore. The cost to income ratio has inched up by 50 bps to 39.1% and led Operating Profit up by 26% to Rs. 889.62 crore.
The provisions and contingencies have more than doubled at Rs. 319.67 crore (up by 112%) owing to huge increase in the provisions for bad and doubtful debts and depreciation on Investments. The bank has provided Rs. 112.88 crore on depreciation on investment (Rs 1.95 crore in the corresponding previous year), Bad and Doubtful debts Rs.165.57 crore (Rs 70 crore in the corresponding previous quarter). The provisions on standard advances have also increased to Rs. 45.11 crore (against Rs. 12.65 crore). Resultantly, growth in PBT was curtailed to a lower single digit growth of 3% to Rs. 569.95 crore. However, whooping 1060 bps decline in effective tax rate at 26.6% has led Net Profit up by 20% to Rs. 418.13 crore.
Yearly Performance:
For the year ended March 11, Allahabad bank has reported 18% increase in Net Profit atRs. 1423.11 crore over 52% increase in the NII at Rs. 4022.47 crore. The other income declined by 10% to Rs. 1370.41 crore owing to 72% dip in the trading profits at Rs. 160 crore. The Operating expenses grew by 45% to Rs. 2338.30 crore and paved cost to income ratio by 450 bps to 43.4%. Thus Operating profit grew by 20% to Rs. 3054.58 crore. Finally after accounting 22% increase in provisions and contingencies at Rs. 1631.47 crore, Net profit was up by 18%.
Other Information:
- The Scrip is hovering at Rs. 218.05 on BSE.
- Considering EPS of Rs. 35.1, PE stands at 6.2 times.
- At Book value per share of Rs. 169.27 and Adjusted Book Value per share of Rs. 140.9 at end of June 2011, the P/BV and P/ABV works out to be 1.3 and 1.5 respectively.
| Particulars | 1106 (3) | 1006 (3) | Var % | 1103 (12) | 1003 (12) | Var % |
| Interest Earned | 3549.84 | 2403.12 | 48 | 11014.69 | 8369.20 | 32 |
| Interest Expended | 2374.29 | 1552.78 | 53 | 6992.22 | 5718.72 | 22 |
| Net Interest Income | 1175.55 | 850.34 | 38 | 4022.47 | 2650.48 | 52 |
| Other Income | 285.93 | 298.56 | -4 | 1370.41 | 1515.90 | -10 |
| Net Total Income | 1461.48 | 1148.90 | 27 | 5392.88 | 4166.38 | 29 |
| Operating Expenses | 571.86 | 444.32 | 29 | 2338.30 | 1617.83 | 45 |
| Operating Profits | 889.62 | 704.58 | 26 | 3054.58 | 2548.55 | 20 |
| Provisions & Contingencies | 319.67 | 151.05 | 112 | 1123.87 | 776.93 | 45 |
| Profit Before Tax | 569.95 | 553.53 | 3 | 1930.71 | 1771.62 | 9 |
| Provision for tax | 151.82 | 206.39 | -26 | 507.60 | 565.29 | -10 |
| Net Profit | 418.13 | 347.14 | 20 | 1423.11 | 1206.33 | 18 |
| EPS*(Rs) | 35.1 | 29.2 | 29.9 | 25.3 | ||
| * Annualized on current equity of Rs. 476.22 crore. Face Value: Rs. 10 Figures in Rs. crore. Source: Capitaline Corporate Database | ||||||
