News Worms
News Worms

Allahabad Bank Q2 net profit up at Rs. 70.20 crore

Allahabad Bank Q2 net profit up at Rs. 70.20 crore

State Bank of India Chairman Rajnish Kumar on Thursday said that there is limited space for further easing of the lending rate.

The company has reported net sales of Rs.5067.78 crores during the period ended September 30, 2017 as compared to Rs.5051.61 crores during the period ended September 30, 2016.

State Bank of India (SBI), India's largest lender, has posted a 37.7 per cent decline in standalone net profit at Rs 1,581.55 crore in the September 2017 quarter as against Rs 2,538.32 crore in the same period of past year amid a rise in bad loans.

As per directions for initiating Insolvency Process- Provisioning Norms, in respect of nine borrowal accounts covered under provisions of IBC, the bank was required to make additional provision of Rs 278.82 crore to be proportionately spread over three quarters starting from the second quarter, i.e. September 2017 in order to make required provision by March 2018, the bank said in a regulatory filing.

The net profit profit stood at Rs 20.70 crore during the same quarter of the last financial year.

"Deposit rate unless you cut you can not cut lending rate ... for time being we are in for much more stable interest rate", he said.

"This time we had some cushion available from SBI Life stake sale".

SBI said it has more than 50 percent provision coverage for the bankruptcy cases.

On a postive note, the bank's asset quality improved on sequential basis post decline in fresh slippages in the second quarter.

EBITDA for the quarter fell by 19.2% to Rs 181 cr as compared to corresponding quarter in the previous year with a corresponding margin contraction of 286 bps. On the other hand net NPAs also lower at 5.43 percent against 5.97 percent on quarter-on-quarter basis. Similarly, the net NPAs rose to 5.43 per cent from 4.19 per cent.

The bank is also witnessing good recoveries from retail and small and medium enterprises (SMEs) with its NPAs in retail declining to Rs 53,000 crore, of the total NPAs of Rs 1,86,115 crore.

Retail advances grew by 13 per cent to Rs 5,04,777 crore in September 2017.

State-run lenders account for the bulk of Indian banks' soured loans which were at a record 9.5 trillion rupees as of June.

"The idea is that we enhance our loss absorption capacity", he told reporters on a conference call, adding they aimed to further improve the provision coverage ratio as the banking sector moves towards global accounting standards.


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