Allahabad Bank maintains commitment to its stakeholders
The Bank successfully launched its Follow-on Public Offer during April
2005.
The trend of growth of business during the current year as indicated in
first quarter is in conformity with the commitment of the Bank as mentioned in our Offer
document.
The Business Plan of the Bank has been finalized with the Zonal Heads.
The total business of the Bank is estimated to grow by 27.2% during the current financial
year.
The highlights of the performance for the quarter-ended June 2005
are summarised as under:
The Business of the Bank has crossed Rs.65000 crores
mark as at June-end 2005 and reached to Rs.65,455 crores as on 30.6.2005.
Year-on-Year basis, the Business increased by 26.67%.
During April-June 2005, the Business grew by 4.04%. Total
Deposits grew by 3.50% (Year on Year – 22.60%) and Gross Credit grew by 5.04% (Year
on Year – 34.76%).
Operating Profit was Rs.230.37 crores during the
April-June’05 as against Rs.318.39 crores during April-June’04.
Operating Profit (Excluding Profit on Sales of Govt.
Securities) increased from Rs.110.66 crores during April-June’04 to Rs.207.26 crores
during April-June’05, registering a growth of 87.29%.
Net Profit of the Bank increased from Rs.137.65 crores to
Rs.162.98 crores during this period, showing a growth of 18.40%.
Net NPA to Net Advances ratio reduced to 0.99% as at June-end 2005
from 1.69% as at June-end 2004.
Provision Coverage ratio increased to 80.78% as at the end of 1st
quarter FY’06 from 77.92% as at March end 2005.
Capital Adequacy Ratio improved to 13.80%. The Bank is fully prepared
for compliance of new Basel II norms effective from 1st April 2006.
Return on Assets (ROA) increased to 1.36% during April-June’05
from 1.20% during 2004-05.
As at June-end 2005, Earning per share (EPS) stood at Rs.15.59 with
diluted equity as against Rs.15.63 as on 31.03.2005 and Book Value increased to Rs.74 from
Rs.67.14 during the same period.
SOCIAL BANKING
For operationalising integrated model of providing training, credit
and facilities of Backward & Forward linkages to farmers /rural entrepreneurs, the
Bank has established Indira Gandhi Farmers’ & Entrepreneurship Development
Institute at Rae Bareily, U. P. Smt. Sonia Gandhi inaugurated the institute on
8th July, 2005. The Bank has planned to open such institutes at Western &
Eastern UP and West Bengal. This will enable the Bank to have better product penetration
and increased business volume.
The Bank has set up 2 Rural Kiosks in Sitapur district and another at
Rae Bareily. These Kiosks are providing information and delivery of Banking services to
the farmers.
TECHNOLOGY NETWORK
The Bank has computerized 1057 branches of which 867 are TBM
branches. Nearly 85% of the Bank’s business covered under computerization.
The Bank has procured source code of application software from the
existing vendor to computerize remaining branches. This will ensure standardization of the
application software across the branches.
At present, the Bank has 91 ATMs and planned to install 250 ATMs
shortly.
M/s Ernst & Young have submitted the report of Business Process
Re-engineering (BPR). Branch segmentation, a key factor in BPR, is being worked out.
ORGANISATIONAL RESTRUCTURING
The Bank has taken up comprehensive steps in improving operational
efficiency at every tier of functioning. The zonal set up is being revitalised with proper
manpower planning.
A report on Business Process Reengineering (BPR) has already been
submitted by the consultant M/S Ernst & Young. It covers segmentation of branches in
tune with Centralised Banking Solution (CBS). The CBS of the Bank is in the advanced stage
of finalisation.
The Bank has laid major emphasis on the improvement of functioning of
its Business Units i.e. the branches. At important centres branch set up has been
refurbished, and infrastructure has been improved for better customer satisfaction and
business promotion.
STATUS OF SUBSIDIARY
In view of the changing economic scenario, the Bank has decided to
revive AllBankFinance Ltd., the wholly owned subsidiary of Allahabad Bank and accordingly
a revamping plan has been drawn up.
The emerging opportunities identified are a) Investment Banking
(Including structured Finance & Debt Advisory), b) Insurance Broking, c) Stock
Broking, d) Portfolio Advisory and e) Underwriting.
RISK MANAGEMENT
The Risk management set up of the Bank has been strengthened with the
induction of trained and competent officials and kept exclusively under charge of a
General Manager.
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 additional capitals mobilised through Follow on Public Issue will largely help the
Bank to meet the increased Capital requirement under Basel-II.
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 selected 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.
PRODUCT INNOVATION & MARKET PENETRATION
- The Bank has introduced a couple of user-friendly products both on deposits and credit
link areas.
- The products like Kisan Shakti Yojana (KSY) and insurance linked scheme has proved to be
grand success among the users.
- The earning from our insurance linked business has already crossed the Break Even Point.
- The Bank has a plan to go into insurance linked business in a bigger way in near future.
HUMAN RESOURCE DEVELOPMENT INITIATIVES
For supporting the future business expansion and also to meet the
challenges of competition, we have already initiated a series of steps for development of
Human Resources of the Bank.
The training outfits of the Bank have been strengthened with a view
to creating a pool of specialised Officers in the area of Credit Management, Treasury
Management, Forex Management and other functional areas of Bank functioning.
The Bank has engaged National Institute of Bank Management (NIBM) as
consultant for developing Training Plan to put the strategic training policy into
implementation.
The Bank is also in the process of finalisation its Human Resource
Policy for which XLRI, Jamshedpur has been selected as HR Consultant.
CORPORATE GOVERNANCE
In line with the Bank’s belief in highest standard of Corporate
Governance, the Bank is committed to comply with the best international practices with
utmost openness and fairness.
Six Independent Directors have been appointed by the shareholders for
the first time in the last Extra-Ordinary General Meeting held on 29.06.05. Although the
Bank launched its maiden public issue in November 2002, the Bank could now induct the
shareholders’ Directors only after it’s follow-on public issue in April 2005.
NEW INITIATIVES
The Bank has executed MOU with SIDBI for financing for Technology
upgradation of SSI units under Credit Linked Capital Subsidy Scheme.
The Bank has tied-up with Wall Street Finance, the primary agent of
Western Union Money Transfer for inward remittance of money from various foreign
countries.
The Bank has already established its strong presence in the Banking
Industry and we are sure to consolidate our position in the days to come.
Kolkata
15th July 2005.
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