Allahabad Bank Surges with Higher Profit
With healthy growth in business generation resulting in increased market
share, the Bank has shown an impressive bottom line for the nine months ended 31st
December 2005.
HIGHLIGHTS:
Highlights of the performance for the nine-month ended 31st December 2005
are as under:
The Business of the Bank reached at Rs.72,346 crores as at December-end
2005. Year-on-Year basis, it increased by 22.77% (from Rs.58928 crores as on 31.12.2004).
During April-December 2005, the Business grew by 15.0%.
Total Working Funds of the Bank crossed Rs.50000 crores mark. It stood
at Rs.50507 crores as on 31.12.2005.
Total deposits of the Bank increased from Rs.38142 crores as on
31.12.2004 to Rs.44631 crores, registering a growth of 17.01%.
Gross Credit increased from Rs.20786 crores to Rs.27715 crores during
this period, showed a growth 33.33%.
The market share of the Bank in aggregate deposits increased to 2.26% as
on last Friday of December 2005 from 2.25% as on the last Friday of December 2004.
Market share in advances also increased to 2.04% from 1.96% during this
period.
Low-Cost Deposits of the Bank increased to Rs.17618 crores as on
31.12.2005 from Rs.15771 crores as on 31.3.2005 and Rs.14650 crores as on 31.12.2004.
The growth of Low-Cost Deposits was 20.3% and Current Deposits was
25.12% on YoY basis.
The share of Low-Cost Deposits to Total Deposits increased to 39.47% as
on 31.12.2005 from 38.69% as on 31.3.2005 and 38.41% as on 31.12.2004.
Gross Credit to Total Deposit Ratio increased to 62.01% as on 31.12.2005
from 55.25% as on 31.3.2005 and 55.01% as on 31.12.2004.
Net Profit of the Bank increased to Rs.555.63 crores during
April-December 2005 from Rs.462.47 crores during April-December 2004, showing a growth of
20.14%.
Non-Fund/Non-Interest Income (Excluding Income from Treasury) of the
Bank increased to Rs.197.62 crores April-December 2005 from Rs.158.80 crores during
April-December 2004, registering a growth of 24.44%.
Net NPA reduced to 0.83% as at December-end 2005 from 1.28% as at
March-end 2005 and 1.48% as at December-end 2004. Gross NPA declined to 4.52% as on
31.12.2005 from 5.80% as on 31.3.2005 and 6.24% as on 31.12.2004.
Provision Coverage Ratio increased to 82.20% as on 31.12.2005 from
77.05% as on 31.12.2004 and 77.92% as on 31.3.2005.
Return on Assets (ROA) increased to 1.47% during April-December’05
from 1.46% during April-December 2004 and 1.20% during 2004-05.
Capital Adequacy Ratio improved to 12.60% as on 31.12.2005 from 12.11%
as on 31.12.2004 and 12.53% as on 31.3.2005. The Bank is fully prepared for compliance of
new Basel II norms.
As at December-end 2005, Earning per share (EPS) stood at Rs.16.96
(annualized) with diluted equity as against Rs.15.63 as on 31.03.2005 and Book Value
increased to Rs.82.60 from Rs.67.14 during the corresponding period previous year.
Implementation of Centralised Banking Solution (CBS): In the first phase
900 branches are to be brought under CBS network.
ANALYSIS OF Q3 RESULTS:
The net profit for quarter ended December 31, 2005 stood at Rs.224.30 Cr
against Rs.159.25 Cr in the third quarter of 2004-05, registering a growth of 40.85%.
Income from Non Fund/Non Interest Business increased to Rs.65.03 crores
during the quarter ended December 2005 as against Rs.45.95 crores during the quarter ended
December, 2004 registering a growth of 41.69%.
The Bank could achieve higher profitability even after absorbing
increased Staff Cost due to wage revision and lower profit from Sale of Investment.
Return on Asset has increased from 1.51% during Q3 of 2004-05 (December
2004) to 1.78% during Q3 of 2005-06 (December 2005).
The Bank could maintain steady growth in Yield on Advances at 8.86%
during Q3 of 2005-06 (December 2005) against 8.70% quarter ended December 2004.
Ratio of Other Operating Expenses to Total Expenses has come down from
14.70% during Q3 of 2004-05 (December 2004) to 13.40% during Q3 of 2005-06 (December
2005).
The Bank could reduce its Net NPA Ratio substantially to 0.83% as on
31.12.2005 against ratio of 1.48% as on 31.12.2004.
Current Deposits grew by 12.97% from Rs.3160 crores as on 30.9.2005 to
Rs.3570 crores as on 31.12.2005 as against the decline of 4.26% in the corresponding
quarter last year.
UNION FINANCE MINISTER’S VISIT:
The Hon’ble Union Finance Minister visited the Bank’s Head
Office on 11th November, 2005 and made a detailed discussion with the Board of Directors
and the Top Management Team of the Bank. The Finance Minister expressed his happiness over
the all round growth of the Bank, its expanding visibility and brand equity.
STRATEGIC THRUST:
a) Resource Mobilization
Commitment to Customers:
In order to fulfill Bank’s professed commitment of extended hour of
banking amidst growing expectation of the customers, the twelve hour banking services (8
AM to 8 PM banking) have been introduced from 14th December 2005 initially in 33 selected
branches across the country.
In consonance with the Annual Policy Statement of the Reserve Bank of
India and with a view to giving greater access to banking services to the larger section
of people, the Bank has launched a new SB scheme named “AllBank No Frill SB
Account”. This SB account can be opened with an initial deposit of Rs.5 only and no
incidental charges on fall of minimum balance and inoperative accounts will be levied.
In order to make Current Accounts more attractive to our customers,
various add on facilities like free remittance, free ATM Card, free cheque book, waivement
of locker rent etc are being extended.
Cross selling of insurance & mutual fund products through tie-up
arrangement with various insurance and mutual fund companies has given good dividend to
the coffer of Bank’s fee-based income. With a well-thought-out programme and
supported by a pool of trained & IRDA/AMFI certified Officers, the Bank has generated
a fee-based income of Rs.12.02 crores so far this year up to 31.12.2005 from cross selling
as well as from CMS & DP business.
b) Deployment
Introduction of Loan Schemes/Policies
To meet the liquidity in the both legs of corporate financing, that is,
purchase and sell, the Bank has brought out this exclusive scheme called vendor financing
and dealer financing. Such financing entails providing banking services like overdraft
facilities and bill discounting to suppliers and buyers.
This scheme has been launched for those firms or companies which intend to
start their export/import business from special economic zone. The allotees of plot in the
SEZ may avail the facility at liberalized terms for purchase of plot and construction of
factory.
Lending Schemes for Rural Infrastructure
Having regard to the importance of rural economy with huge business
potentialities embedded in it and to help make the President of India’s vision of
India in 2020 a reality, the Bank has taken the pioneering step of introducing the
following new products:
This is to finance rural nursing homes, clinics, diagnostic centers in the
private sector. Maximum loan limit is Rs.60 lakhs.
This scheme will finance setting up of schools, training centers etc.
Maximum loan limit is Rs.50 lakhs.
Extending Credit to SME Sector
With a view to curving out a bigger market share, the Bank has devised a
borrower-friendly loan price, security norms and other terms & conditions for
extending credit to SME Sector. Bank’s exposure to SME sector amounted to Rs.2554
crores as at the end of December-05.
Customer-friendly Retail Lending
With a view to giving more benefits to the retail credit customers, the
Bank has taken various initiatives. These include:-
Second time education loan
Reduction of interest rates under Car Loan Scheme, Saral Loan Scheme
etc.
Realignment of interest rates under Housing Loan Scheme (Public)
Offering festival bonanza in the shape of special 1% interest discount
on all retail loan products (except Housing Loan) during the festival session from
01.10.2005 to 31.01.2006.
Total disbursement under retail lending in the nine months ended
31.12.2005 amounted to Rs.1340 crores as against Rs.1112 crores in the corresponding
period last year. Total outstanding under retail credit as on 31.12.2005 stood at Rs.4655
crores as compared to Rs.3601 crores in the corresponding period last year, showing a
growth of 29 per cent YOY.
c) Capacity building
Risk Management:
The Bank has established a structured, dynamic, proactive and integrated
Credit Risk Management System to proper identification & quantification of the credit
risk associated with the credit proposals.
The Bank has developed various risk rating module for credit risk rating.
The Bank has also devised risk rating module exclusively for SSI & SME sector.
In regard to Operational Risk, the Bank has framed policy and procedural
guidelines for implementation as per the extant guidelines of Reserve Bank of India.
Technological Upgradation:
The Bank has taken massive initiative to implement technology in improving
the customer service as well as systems of the Bank. Some of the initiatives are as under:
CBS of 900 branches would ensure more than 70% business coverage,
Technology plan would ensure interface of CBS & non-CBS Branches,
enabling the Bank to present Statement of Accounts in one day,
The Bank will achieve 100% computerisation by March-end 2006.
A dedicated team of 140 specialists (Engineers) have been earmarked for
the purpose,
Installed 124 ATMs, another 100 in advanced stage,
ATM switch – ELECTRA-OPUS in operation and established Data Centre
at Navi Mumbai. Joined National Financial (NFS) switch with coverage additional 5,000
ATMs,
Live RTGS in 65 branches, Live EFT – 267 branches (8 cities), SFMS
– 76 branches (9 cities), Cheque Truncation System – 52 branches (New Delhi)
etc.
VSAT networking 97 branches, 44 ZOs,
OLTAS in 167 branches & computerized 360 Government business
branches,
Adopted IT Security Policy, Disaster Recovery Policy,
Established Institute for Research & Technology at Panchkula,
Chandigarh
HR Initiative Of The Bank:
The XLRI engaged as a consultant of drafting of comprehensive HR Policy
document, has since submitted their report on short term action points covering
categorization of branches/offices and organizational structuring (Geographical /
Functional). The report is under consideration of the Bank’s board. The complete
report covering all other areas of Human Resources policies will be finalized within next
two months.
Corporate Communication:
Bank’s visibility has increased manifold and its products are now
well known. With conscious efforts for better communication, the Bank has successfully
created an environment in which mutual understanding and relationship amongst various
stakeholders have strengthened.
SUBSIDIARY OF THE BANK:
AllBank Finance Ltd., a wholly owned subsidiary of the Bank, have been
registered with the SEBI as a Category I merchant bankers and underwriters. It has been
decided to open the corporate office of the subsidiary at Mumbai, economic capital of the
country and major hub for merchant banking activities. The company has earned a Net Profit
of Rs.2.25 crore for nine months ended 31.12.05 as against Rs.0.49 crore in the previous
corresponding period.
FUTURE INITIATIVES:
Bank’s endeavour to operationalise an integrated, comprehensive and
holistic training model for farmers and entrepreneurs is to continue. On the lines of
Indira Gandhi Farmers’ & Entrepreneurship Development Institute set up by the
Bank at Rae Bareily (UP), two more such institutes will be opened at Tirwa (UP) and Bolpur
(WB). Subsequently, similar institutes will be opened at Mirzapur (UP), Bhopal (MP) and
Patna (Bihar).
Thrust on mobilization of Savings Bank Deposits and Current Account
Deposits to continue. Drive for opening new low cost deposit account will be intensified.
The Bank has planned to increase its presence in Southern & Western
Part of the Country. This would expand our delivery channel for better credit deployment.
The Bank is going to introduce a Scheme namely All Bank Gyandeepika
Scheme for educational loan for the student of Nursery to Class XII.
Financing SMEs in a big way with diversified product range will be
undertaken.
Competency Based Training (CBT) will be implemented for creating an
ideal environment for learning, unlearning and re-learning on an ongoing basis.
Dated:
Kolkata, the 24th January 2006
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