Allahabad Bank mounting up growth momentum

Allahabad Bank, one of the premier nationalized banks of the country celebrating 143 years of service to the nation, further accelerates its growth momentum in most of the performance parameters as evident from half yearly results of the Bank for the fiscal 2007-08. The Bank has already crossed an important milestone of amassing Rs. 1 lac crore business as at March-end, 2007. The trend of growth of business and profitability at the end of Sept, 2007 half year is in conformity with the projection made for the quarter of the year 2007-08.

The highlights of the performance for the half year ended September, 2007 are summarised as under:

• The Business of the Bank has crossed Rs.1,08,000 crore mark as at Sept-end 2007. The Business of the Bank stood at Rs.1,08,458 crores as on 30.09.2007 as against Rs.90,477 crores corresponding date previous year.

• Year-on-Year basis, the Business increased by 19.87%.(During April-Sept, 2007 : 6.90%)

• Total Deposit of the Bank went up to Rs.65,896 crores as on 30.9.2007 from Rs.54,006 crores as on 30.9.2006 and Rs.59,544 crores as on 31.3.2007.

• Year-on-Year basis, Total Deposits grew by 22.02% (During April-Sept, 2007 : 10.67%)

• Market Share in aggregate deposits was 2.28% as at Sept-end 2007.

• Gross Credit was Rs.42,561 crores as on 30.9.2007 as against Rs.36,471 crores as on 30.9.2006 and Rs.41914 crores as on 31.3.2007

• Year-on-Year basis, the Gross Credit increased by 16.70%.

• Market share in advances stood at 2.10% as on 30.9.2007.

• Gross Credit to Total Deposit ratio stood at 64.59% as at Sept-end 2007.Operating Profit increased from Rs.450.66 crores during April-Sept’06 to Rs.588.42 crores during April-Sept’07, registering a growth of 30.57% during the period.

• Net Profit of the Bank was Rs.440.18 crores during April-Sept’07 as against Rs.338.28 crores in the corresponding period last year registering a growth of 30.12%.

• Profit Before Tax (PBT) of the Bank went up by 72.78% from Rs. 307.96 crores during the HY’2006-07 to Rs.532.08 crores during HY’2007-08.

• Gross NPA to Gross Advances further declined to 2.40% as at Sept-end 2007 from 3.24% as at Sept-end 2006 and 2.61% as at March-end 2007.

• Net NPA to Net Advances ratio was 0.75% as at Sept-end 2007 which was down from 1.07% as at March-end,2007 but remained steady compared to 0.75% as at Sept-end 2006.

• Capital Adequacy Ratio was 13.01% as at Sept-end 2007 which is above the stipulated norm of 9%, as against 13% as on 30.9.2006 and 12.52% as on 31.3.2007.

• Net Interest Margin (NIM) was 2.86% as on 30.9.2007.

• As at Sept-end 2007, Earning per share (EPS) stood at Rs.19.71 as against Rs.15.15 as on 30.9.2006 and Rs.16.79 as on 31.3.2007. Book Value per share was Rs.109.57 increased from Rs.88.99 as on 30.9.2006 and Rs.100.22 as on 31.3.2007.

• Return on Assets improved from 1.21% as on 30.9.2006 to Rs.1.26% as on 30.9.2007.

• Business per employee rose from Rs.4.19 crores as on 30.9.2006 to Rs.5.04 crores as on 30.9.2007. As on 31.3.2007, the amount stood at Rs.4.56 crores.

Business

• The Bank’s total business increased from Rs.1,01,458 crores as on 31.3.2007 to Rs.1,08,458 crores as on 30.9.2007, registering a growth of 6.90% during April-Sept 2007. On Year-on-Year basis, it grew by 19.87%.

• Total Deposit of the Bank went up by 22.02% to reach Rs.65,896 crores as on 30.9.2007 from Rs.54,006 crore a year ago and Rs. 59,544 crores as on 31.3.2007

• Gross Advances stood at Rs.42,561 as on 30.9.2007 as against Rs.36,471 crores (grew by 16.70%) corresponding date last year.

Quarterly Focus points

• Net Profit for the quarter ended Sept, 2007 was Rs.239.78 crores (Q-1 Rs.200.40 crores) as against Rs. 210.03 during the second quarter of 2006-07 showing an increase of 14.16%.

• Gross Profit of the Bank was Rs.299.55 crores (Q-1: Rs.288.87 crores) compared to Rs. 243.23 crores during the second quarter of 2006-07 showing an increase of 23.16%.

• Non-Fund Non-Interest Income during the second quarter of 2007-08 was Rs. 104.24 crores (Q1: Rs.101.12 crores) as against Rs.84.72 crores during the corresponding quarter previous year showing an increase of 23.04%.

• Gross NPA declined from 2.46% at June-end, 2007 to 2.40% as on Sept,2007.

• Net NPA declined to 0.75% as on 30.9.2007 from 0.76% as on 30.6.2007.

• Operating Expenses to Average Working Funds further reduced to 1.49% during the quarter compared to 1.63% a year ago (1.52% as on 30.6.2007)Suggesting better cost management.

• Establishment expenses to total expenses declined to 11.50% this quarter from 12.63% previous quarter and 13.84% of corresponding quarter of previous year.

• EPS increased to Rs. 21.47 for quarter-ended 30.9.2007 from Rs.17.94 for 30.6.2007 and Rs.18.81 for 30.9.2006. Book Value per share increased from Rs.88.99 as on 30.9.2006 and Rs.104.23 as at June-end, 2007 to Rs.109.57 as at 30.9.2007.

• Capital Adequacy Ratio increased from 12.71% quarter ended 30.6.2007 to 13.01% at the end of Sept., 2007 quarter.

Branch Expansion

• During the year from Sept., 2006 to Sept, 2007, 114 more branches were opened throughout the country taking the total number of branches to 2134 of which 982 (46%) are Rural, 397 (19%) Semi-urban, 449 (21%)Urban and 306 (14%) Metropolitan.

Manpower & Recruitment

• Total manpower strength of the Bank stood at 20,036 as on 30.9.2007.

• To meet the expansion requirement and need of specialized services, the Bank has already initiated process for recruitment of 400 Officers and 600 Clerical staff.

Social Banking

• Priority Sector Credit grew from Rs.14,138.14 crores as on 30.9.2006 to Rs.16,779 crores as on 30.9.2007 recording a year on year growth of 18.68%. The share of Priority Sector Credit to Adjusted net bank credit (ANBC) stands at 40.03%.

• The outstanding agriculture credit increased from Rs.6246 crore as on September-end 2006 to Rs.7805 crore as on September-end 2007 registering growth of 24.96% on year-on-year basis.The share of agriculture to Adjusted net bank credit (ANBC) stands at 18.62%.

• Credit to SME sector went up to Rs.4134.94 crores as on September-end, 2007 from Rs.3426.81 crores as on corresponding date previous year showing a growth of 20.66% during the period ended September, 2007 against stipulated norms of 20%.

• In tune with national objectives, the Bank has put the following areas on special thrust under priority sector for the year 2007-08 – Financial Inclusion, Issuance of General Credit Card, Financing SME sector, Food and Agro processing, Godown/Cold Storage, Plantation and Horticulture, lending to Micro Finance Instituions etc.

Fee Based Banking

• In order to widen scope of selling of Bancassurance and mutual fund products, the Bank has deployed 130 fully trained officers for exclusively marketing third party products.

• In order to give boost to the NF/NI Income, the Bank has tied up with LICI for selling of life insurance products, National Insurance Co Ltd for non-life insurance products, with ECGC for export insurance products and with 5 mutual fund companies like UTI-MF, Principal Pnb, Kotak MF, Reliance AMC and Franklin Templeton for mutual fund products.

• The Bank has recently opened Depository Services at New Delhi. With this, Bank now offers Depository Services at Kolkata, Mumbai and New Delhi under NSDL and Lucknow, Kanpur and Varanasi under CDSL.

• Cash Management Services are also offered from 5 Quick collection Service (QCS) Branches/Centres at Kolkata, Lucknow, New Delhi, Chennai, Mumbai and 16 Local Cheque Collection Hubs..

Technology Initiatives

• Bank has computerized more than 99% of its branches/extension counters as well as business.

• Bank has started CBS implementation and 53 Branches have been rolled over in CBS platform

• The Bank has connected 209 ATMs with 233 branches on its network. With membership of VISA & National Financial Switch, our card members can now access over 14,000 ATMs at a very nominal cost.

• 122 branches are participating in Real Time Gross Settlement(RTGS) network.

• Bank has live NEFT in 100 branches, ECS facility in 46 centres.

• All Branches dealing in Government Business have been computerized.

Risk Management Mechanism

• In tune with Final Guidelines of RBI on Implementation of New Capital Adequacy Framework (Basel-II), the Bank has initiated requisite steps to become Basel II compliant as on 31.3.2008. In this regard, the Bank has put in place Board approved policies on Rating of Claims under Credit Risk by External Credit Risk Rating Agencies, Credit Risk Mitigation & Collateral Management and Disclosure Policy etc.

• It has also been decided by the Bank to commence rating of Corporate Borrowers through four Domestic External Credit Rating Agencies namely CARE, CRISIL, FITCH and ICRA duly approved by RBI for which the process of execution of MOUs with such rating agencies is in progress.

• The Bank is updating / fine tuning various systems and procedures, MIS technological capabilities, risk management structure etc. for smooth transition to Basel-II environment.

Product Innovation & Market Penetration

• To commemorate the Golden Jubilee of Indian Independence, the Bank launched “Golden Jubilee Deposit Scheme” on attractive terms for all sections of customers.

• The Bank has 126 Retail Banking Boutiques (RRBs) which are solely focused on retail lending and manned by young and dynamic officers with specialized training.

• As part of festival bonanza, the Bank has slashed interest rate on Housing Loan up to 0.75% per annum across the board for loans sanctioned between 1st October to 31sr December, 2007. This is a good news for the Housing Loan takers throughout the country.

• The Bank has a plan to go into insurance linked business in a bigger way in near future.

• The Bank will be organizing Housing Loan Camps/Melas for creating an awareness and popularizing the Housing Loan Scheme among people in general during the quarter October to December, 2007.

Human Resource Development

• To meet the challenges of the changing environment due to globalization and economic liberalization, the Bank initiated proactive steps for development of its Human Resources.

• The Bank has been continuously exposing its executives, officers and staff members to need based training programmes at its 6 training colleges and also in reputed Training Institutes in India and abroad.

• The Bank has developed a team of officers for in-house testing, development, implementation and maintenance of application software packages at Bank’s Institute for Research and Technology at Panchkula (Haryana), besides conducting training programmes there.

• To impart quality in-house training to workforce, the faculty members at Bank’s Training Colleges are also exposed to Faculty Development Programmes conducted through Resource persons.

Customer Service

The Bank has geared up its entire machinery to bring about qualitative improvement in Customer Service. The Bank in this regard has taken the following steps / measures :

• Bank has taken the membership of Banking Codes & Standards Board of India (BCSBI) adopting a code of commitment for ensuring fair and transparent treatment to individual customers.

• Under this, Bank has adopted Compensation Policy for customers, Grievance Redressal Policy, Deposit Policy among others.

• Bank’s Grievance Redressal structure has been further strengthened for speedy disposal of complaints according to seriousness prioritized by ABC grading.

• Bank has further simplified procedure for settlement of claims in respect of deceased deposit accounts.

• Complaint format has been made available in Bank’s Website for online submission of complaints, if any.

• The Bank has reconstituted the Standing Committee on Customer Service in which 3 prominent personalities of public domain have been included for better interaction on various aspects of the customer service.

New Initiatives

• Speedy extension of CBS platform to more branches.

• Introduction of Door Step banking.

• All-Bank Pilot Training Loan Scheme for pilot training.

• Bank is planning to go for opening more foreign branches after opening of branch at Hong Kong

The Bank is already set on a steady growth path establishing its performing image in the Banking Industry and we are sure to consolidate our position in the days to come in keeping with the trust of our shareholders as also of our stakeholders.

Kolkata
17th October, 2007.