Allahabad Bank narrows losses to Rs 732.81 crore in Q3

Kolkata: State-run Allahabad Bank on Wednesday announced a net loss of Rs 732.81 crore for the quarter ended December 31, 2018, narrowing the net loss of Rs 1,263.79 crore reported for year ago period.

The lender, which is under the prompt corrective action (PCA) of the Reserve Bank of India (RBI), had reported a net loss of Rs 1,822.71 crore for the second quarter of the current fiscal.

The lender is expecting to make a turnaround and ease out of the PCA by June.

“We should post a turnaround by June 2019 and be able to present ourselves before the regulator for a review of PCA status,” the bank’s Managing Directors (MD) and Chief Executive officer (CEO) S.S. Mallikarjuna Rao told reporters here.

The city-headquartered lender posted an operating profit of Rs 768.97 crore, down by 16.6 per cent year-on-year from Rs 922.17 crore in the corresponding quarter of the last fiscal. But the operating profit increased by 44 per cent the quarter-on-quarter from Rs 533.97 crore.

On a year-on-year basis, total income at Rs 4,756.88 crore during the period remained flat compared with Rs 4,755.33 crore in the year-ago quarter. It increased by nearly 8 per cent on the quarter-on-quarter basis from Rs 4,410.72 crore in the July-September period.

During the third quarter of FY19, gross non-performing assets (NPAs) increased on a quarter-on-quarter basis in absolute terms to Rs 28,218.79 crore from Rs 27,236.19 crore in the September quarter.

The net NPA was at Rs 10,865.26 crore in the third quarter, down from Rs 11,082.74 crore by the end of September quarter.

Gross NPA of the bank as a percentage of total loans was at 17.81 per cent by the end of December quarter against 17.53 per cent in the previous quarter. During the period under review, net NPA ratio stood at 7.70 per cent, which decreased sequentially from 7.96 per cent in the second quarter this fiscal.

Provisions and contingencies were at Rs 1,495.34 crore, down substantially from Rs 2,413.46 crore in Q3FY18. At Rs 1,900 crore, provisions for NPAs decreased by 7 per cent year-on-year.

The total slippages during the third quarter in the current fiscal was close to Rs 2,500 crore, he said. Of this, agriculture contributed nearly 30 per cent, large corporate 27 per cent, MSMEs 25 per cent and retail 10 per cent, he added.

Following the announcements of farm loan waiver by Madhya Pradesh, Chhattisgarh and Rajasthan, recovery from the sector has been “affected”, he remarked.

The lender was hopeful of getting resolution in 10 accounts, referred to the National Company Law Tribunal (NCLT) with a total exposure of Rs 2,729 crore. In all, the bank has around 140 accounts in the NCLT with a total exposure of around Rs 18,000 crore.

“We are expecting a recovery close to Rs 1,400 crore from these 10 accounts after a 50 per cent haircut by the end of this fiscal,” Rao said, adding the target for recovery through its own efforts has been set at Rs 2,000 crore in the fourth quarter of this fiscal.