Allahabad Bank accelerates its growth momentum
The Bank is accelerating its growth path in business accretion and also
increased its market share to improve the performance.
The highlights of the performance for the half-year ended
September 2006 are summarized as under:
The Business of the Bank crossed Rs.90,000 crores mark to reach
at Rs.90,477 crores as at September-end 2006.
Year-on-Year basis, the Business increased by 31.39% as against
24.45% in the corresponding period last year.
Total Assets of the Bank crossed Rs.60,000 crores mark and
reached to Rs.61,499.30 crores as at September-end 2006, registering a growth of 23.49%
over September-end 2005.
During April-September 2006, the Business grew by 15.2% as
compared to 9.5% in the corresponding period last year. Total Deposits grew by 11.4% as
compared to 7.2% during the corresponding period last year. Year-on-Year basis
(Oct.’05 to Sep.’06), total deposits grew by 23.58% as compared to 21.4% in the
corresponding period last year.
Gross Credit grew by 21.3% during April-Sept.’06 as
compared to 13.6% during April-Sept.’05. Year-on-Year basis the growth was 45.0% as
compared to the growth of 30.2% in the corresponding year last year.
Low-Cost Deposits of the Bank grew by 6.60% during the half-year
ended September 2006 as against 6.28% during the half-year ended September 2005.
Year-on-Year basis, the growth was 21.13% as compared to 16.3% in the corresponding period
last year.
As at Sept-end 2006, the market share of the Bank in Aggregate
Deposits increased to 2.32% as against 2.25% in the corresponding period last year.
Market share in Gross Credit also increased to 2.21% from 1.97%
during this period.
Operating Profit was Rs.450.66 crores during the
April-September’06 as against Rs.426.47 crores during April-Sept’05, registering
a growth of 5.67%.
Operating Profit from core operations (Excluding Investment
Trading Profit) increased from Rs.355.74 crores during April-Sept.’05 to
Rs.438.81 crores during April-Sept’06, registering a growth of 23.35%.
Net Profit of the Bank increased from Rs.331.33 crores
to Rs.338.28 crores during this period, showing a growth of 2.10%. This was despite making
a provision of Rs.16 crores for mark-to-market requirement for an Interest Rate Swap
(IRS), which was “NIL” during the corresponding period last year.
Net Profit (Excluding Investment Trading Profit)
increased from Rs.260.60 crores during April-Sept.’05 to Rs.326.43 crores during
April-Sept’06, registering a growth of 25.26%.
Net NPA to Net Advances ratio reduced to 0.75% as at September-end 2006
from 0.97% as at September-end 2005.
Capital Adequacy Ratio stood at 13.00%. The Bank is fully prepared for
compliance of new Basel II norms.
Return on Assets (ROA) was 1.21% during April-September’06.
Operating Expenses to Average Working Fund declined to 1.73% during
April-September 2006 from 2.15% during April-September 2005.
As at September-end 2006, Earning per share (EPS) stood at Rs.15.15 and
Book Value increased to Rs.88.99 from Rs.77.76 during the same period.
Business (Fortnightly Average) per Employee increased to Rs.4.19 crores
during April-September 2006 as compared to Rs.3.36 crores during 2005-06.
Analysis of Q2 Results:
The net profit for quarter ended September 30, 2006 stood at Rs.210.03
crores (Q1: Rs.128.25 crores) against Rs.168.35 crores in the corresponding quarter last
year, registering a growth of 24.76%. The net profit (excluding Trading Profit) increased
to Rs.184.53 crores (Q1: Rs.141.90 crores) from Rs.120.72 crores during this period, grew
by 52.85%.
Operating Profit was Rs.243.23 crores (Q1: Rs.Rs.207.43 crores) during
the quarter under review as against Rs.241.42 crores in the corresponding period last
year. Operating Profit (excluding Trading Profit) increased to Rs.217.73 crores from
Rs.193.80 crores during the same period.
Income from Non Fund/Non Interest Business increased to Rs.84.72 crores
(Q1: Rs.75.82 crores) during the quarter-ended 30.09.2006 as against Rs.70.85 crores
during the corresponding previous period.
The Bank could reduce its Net NPA Ratio substantially to 0.75% as on
30.09.2006 against ratio of 0.81% as on 30.06.2006.
The Bank has mobilized more than 5 lakhs Deposit accounts during the
low-cost mobilization period during 16th August 2006 to 30th September’06. The Bank
has also augmented Rs.1162 crores of low-cost deposits during this period.
Low-Cost Deposits grew by Rs.942.35 crores (4.87%) during the quarter
under review as against the growth of Rs.648.18 crores (4.02%) in the corresponding
quarter last year.
Agricultural Credit
The Bank has formulated its plan & strategies to improve its lending
under Priority Sector Credit particularly in Agricultural and SME Sector in line with the
policy of the Government of India. The Bank has disbursed agricultural credit more than
Rs.1100 crores during April-September 2006.
Nearly 74,000 Kisan Credit Cards (KCCs) have been issued during the
first half of FY07 as against the target of 64,000.
Kisan Credit Card (KCC) scheme for production credit and Kisan Shakti
Yojana(KSY) scheme for investment credit have been integrated and a common card named
“Kisan Credit-cum-Kisan Shakti Card” has been introduced by the Bank to boost
farm credit as a business strategy.
The Bank has taken Micro Finance delivery through Self-Help Groups as a
commercial business activity.
Sensitisation programmes have organized in rural and semi-urban branches
across the country to enhance agricultural credit in an aggressive way.
Retail Credit
The Bank has bouquet of Retail Credit Products to cater the needs of all
sections of the society. The total outstanding amount under retail credit as on 30.9.2006
was Rs.6008 crores as against Rs.4184 crores as on 30.9.2005, registering a growth of
43.6%.
The Bank has 236 Retail Banking Boutiques (RBBs), which are solely
focused on Retail Lending. The Bank has further planned to increase its RBBs in the Tier
II/Tier III towns to boost and spread out its Retail Credit base.
Upto 1% reduction in Interest rate in all retail-lending schemes have
been announced by the Bank as its gift for the borrowers during the festival months.
The Bank’s AllBank Rent Scheme has been further
extended to cover the other receivables also.
Technology Network
The Bank has joined the elite club of CBS banks having rolled out its
first CBS branch on 23rd Oct’06. Another 35 to 40 pilot branches will be rolled out
by March 07. The Bank is expected to have 400 CBS branches by year ending 2007 and 900 CBS
branches by year ending 2008.
The remaining branches will be on Bank’s common software, source
code of which has been procured from the vendor, but customized to our requirements at
Bank’s Institute for Research and Technology, at Panchkula and the entire support for
the software will be provided in-house.
The Bank has connected 203 ATMs through ATM Switch installed at
Navi-Mumbai, having card base of 1,51,346 with average daily hits around 5000.
Inter Bank Fund Transfer (SFMS-RTGS) in 113 branches and NEFT in 67
branches is available.
All 37-currency chests of the Bank are mechanized and connected with
Reserve Bank of India.
The implementation of Cheque Truncation System in 55 branches under
National Capital Region (NCR) of Delhi is under process.
Risk Management
Risk Management Committees has been set up at Board level and at various
operational levels for measurement, mitigation and management of various risk factors.
The Bank is fully prepared for compliance of Basel-II requirements. The
Bank has also implemented the parallel run for application of new Capital Adequacy
framework with effect from June 2006.
Improvement in Risk Management practices has been coupled with the
betterment of asset quality through introduction of proper credit management practices.
Centralised Credit Appraisal Cells has been created at all zonal offices
with proper networking arrangement for better processing of credit proposals and prompt
decisions.
Improved credit monitoring measures has already been put in place for
insulating the Bank from future loan losses.
Market Penetration
The Bank has introduced a new product like Tax Benefit Term
Deposits Scheme. Under the scheme, the taxpayers are eligible to get reduction in Taxable
income upto Rs.1 lakh per year and earn an interest @8.00% p.a. (Annualized Yield of
9.72%).
The Bank organized Low-Cost Deposit mobilization period during
16th August 2006 to 30th September 2006. More than 5 lakhs deposit accounts were opened
during this period.
The Bank has successfully floated unsecured lower Tier II Bond to
consolidate its Capital Base and mopped up Rs.561.90 crores during the quarter.
Future Plan
The Bank has a Vision to reach its business position of Rs.1,00,000
crores by March-end 2007 and Rs.2,00,000 crores by March-end 2010.
Banks first overseas branch at Hong Kong will be operationalised during
this quarter for which formalities are nearing completion including finalization of system
vendor and posting of manpower.
The Bank has identified the following areas as its core competencies for
achieving the Vision 2010.
Retail Banking
Improved marketing strategies & wide publicity
Innovation of Products suitable for target segment of customers
Identified delivery points for retail products
Agricultural Credit Delivery & SME :
New products for wholesale lending to MFIs
Coverage of lending through emerging tools of Risk hedging
Introduction of IT in agriculture & SME lending
Customer Friendly Service to Small Depositors:
Customer Recognition, Retention & Satisfaction
Customer Segmentation & better technology platform
Renewed thrust on Customer Service and Grievance Redressal.
The Bank has already established its visibility and strong
presence in the market and we are confident to move at a faster pace to consolidate our
position in the coming days and improve further.
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