ALLAHABAD BANK LOOKING BEYOND BOUNDARIES

HIGHLIGHTS OF PERFORMANCE - DECEMBER 2004

• The Business of the Bank crossed Rs.58,000 crores mark and reached to Rs.58,828 crores as on 31.12.2004.

• Year-on-Year basis, the Business increased by 37.74% against the growth of 9.84% in the corresponding period last year.

• Total Deposits of the Bank grew by 21.17% during April-Dec.'2004 as against 10.38% during the corresponding period last year. YOY basis, it increased by 35.70%.

• Market Share in aggregate deposits increased to 2.26% as on 31.12.2004 from 1.96% as on 26.3.2004.

• Operating Profit of the Bank marked a growth of 53.14% during the April-Dec.'04 over April-Dec.'03.

• Net profit increased by 90.91% during the nine-month ended December 2004 over the corresponding period last year. It grew by 61.91% during the quarter-ended December 2004 over the corresponding period last year.

• Net NPA reduced to 1.48% as on 31.12.2004 from 2.37% as on 31.3.2004 and 4.17% as on 31.12.2003.

• Gross NPA declined to 6.24% as on 31.12.2004 from 8.66% as on 31.3.2004 and 9.94% as on 31.12.2003.

• EPS (annualised) increased to Rs.17.79 from Rs.13.37 during this period.

• Book Value per share improved to Rs.58.08 from Rs.44.76 during this period.

• Return on Assets (ROA) rose to 1.46% during April-Dec.' 2004 from 1.34% during 2003-04 and 1.02% during April-Dec 2003.

• Cost of Deposits reduced to 4.97% during April-December 2004 from 5.63% during 2003-04.

• Productivity (Business per employee) increased to Rs.2.71 crores during April-December 2004 as against Rs.2.15 crores during 2003-04.

• The share of Agricultural Credit and Priority Sector Credit to Net Bank credit Bank has well exceeded the stipulated norms of 18% and 40% respectively.

• The Bank disbursed agricultural credit to the tune of Rs.1610.25 crores during April-December 2004 as compared to Rs.337.65 crores during the corresponding period last year, registering a growth of 376.9%.

• The Bank has received the consent from Government of India, Reserve Bank of India and from the existing share holders, to float the second public issue to strengthen its capital base for BASEL II Capital Accord Compliance and also to increase resource base to meet the funding needs commensurate with projected expansion plan.

PROFITABILITY

(Amount in Rs. Crores)

• Operating Profit of the Bank during April-December 2004 increased to Rs.851.58 crores from Rs.556.08 crores during April-Dec..'2003, showing a growth of 53.14%. During the quarter-ended December 2004, it increased by 0.44% over the corresponding period last year.
      
• Net Profit of the Bank increased to Rs.462.47 crores during the period under review from Rs.242.24 crores during the corresponding period last year, registering a growth of 90.91%. During the quarter under review, Net profit grew by 61.91% over the corresponding period last year.

BUSINESS GROWTH

(Amount in Rs. Crores)

• The Bank's total business registered a growth of 23.11% during April-December 2004 as against 9.84% during April-Dec.'04. Year-on-Year basis, the growth was 37.74% during January'04 to December'04 as compared to 13.78% during the corresponding period last year. The Business of the Bank has increased to Rs.58,928 crores as at December-end 2004 from Rs.47,865 crores as at March-end 2004.
    
• Deposits grew by 21.17% during nine-month ending Dec.'04 as compared to 10.38% in the corresponding period last year. Gross Advances grew by 26.84% against the growth of 8.81% during the nine-month ended December 2003.
     
• Non-Food credit grew by 27.10% during April-December'04 and it grew by 42.96% YOY basis.
    
• During April-Dec. 2004, aggregate deposits of the Bank increased by Rs.6829 crores or 22.06% as against the growth of Rs.2776 crores or 11.24% in the corresponding period last year. Year-on-Year basis, it improved by 37.59% as compared to 14.43% in the corresponding period last year. The market share of aggregate deposits of the Bank increased to 2.26% as on 31.12.2004 from 1.96% as on 26.3.2004 and 1.90% as on 26.12.2003.

AGRICULTURE BANKING

• The Bank has given focused attention to revamp its agricultural credit operations for the farming community of our country. The Bank has disbursed Rs.610.25 crores as agricultural credit during April-December 2004 as against the disbursement of Rs.337.65 crores during April-December'03 and Rs.848 crores during 2003-04.
    
• Minimum target of lending to agriculture credit i.e. 18% of the Net Bank credit is being achieved since March-end 2004. As on 30.9.2004, agriculture credit to Net Bank Credit formed 19.63%.
    
• The Bank has brought 1,43,750 new farmers, i.e. an average of 112 farmers per branch, in its fold during April-December 2004, exceeding the target of 100 new farmers per Rural and Semi-urban branches per year.
    
• The Kisan Credit Card (KCC) base of the Bank increased by 125978 during April-December 2004 as against 80309 cards during April-December 2003. The amount of disbursement was Rs.439.85 crores during April-Dec.'04 as compared to Rs.208.64 crores during April-Dec.'03. The cumulative number of KCC holders as on 30.12.2004 stood at 5,45,717.
    
• The Kisan Shakti Yojana (KSY), a new comprehensive scheme to meet the farm and non-farm credit has already been highly accepted by the farming community. So far, 34,231 farmers has joined in this scheme with a financial outlay of Rs.459.04 crores.
    
• The Bank has so far provided credit facilities to 28,840 number of SHGs, of which, 14,460 are formed by the Women Entrepreneurs and disbursed Rs.50.68 crores upto 31.12.2004. The outstanding credit to women beneficiaries stood at Rs.1328.36 crores as on 31.12.2004, forming 5.92% of the Net Bank Credit as against the target of 5%. The Bank has organized to form 950 SHGs for tenant farming.
     
• Economic Clusters have been identified for preparation of area-based projects for promotion of the cash crop, Fruits, Flowers and Medicinal plants.

FEE BASED BANKING

• In pursuance of its tie-up with National Insurance Co. Ltd., Life Insurance Corporation of India, UTI Mutual Fund and ECGC Ltd., the Bank, during the quarter, stepped up the bancassurance and other fee-based activities through its 132 fully trained and qualified Officers deployed across the length and breadth of the country. During the first three quarters of the current financial year, the Bank sold 80000 policies with premium income of more then Rs.22 crore under the bancassurance tie-ups.
    
• During the quarter, the Bank has launched AllBank Griha Mangal Scheme for its all existing as well as new housing loan customers. The Scheme provides a low cost life insurance facility under group plan covering the entire housing loan liability of the customer during the loan period. In the first few days of its launch the Bank has received premium income of over Rs. 130 lacs from more than 1500 housing loan customers who have opted to join the Scheme.
    
• A comprehensive business restructuring and revival plan is being drawn to rejuvenate its well capitalised subsidiary ALLBANK Finance Ltd. to push up fee-based income.

RETAIL BANKING

• During April-December 2004, disbursement under Retail Lending schemes was Rs.1065 crores. Outstanding retail portfolio as on 31.12.2004 was Rs.3573 crores as compared to Rs.2624 crores as on 31.12.2003. More than 250 specialised delivery channels of the Bank, in the form of Retail Banking Boutiques, continued to drive the retail lending activities.

RISK MANAGEMENT

• The Bank has set up an integrated Risk Management Systems to identify, measure and mitigate Credit, Market and Operational Risk for its various operations. The Bank has completed risk rating exercise for its entire credit portfolio. The Bank has prepared a road map for implementation of new Basel II norms and necessary steps have been initiated to fulfill the requirements under the revised norm.

HUMAN RESOURCE DEVELOPMENT

• The Bank has formulated a comprehensive policy for upgradation of knowledge and skill of its Officers & Employees with the assistance of NIBM. Specialised training programmes for different contemporary banking services like Risk Management, Treasury Management, Corporate Credit Management etc. has been conducted with internal resources and external institutions viz., NIBM, BTC etc. The Bank recruited probationary officers as well as officers in different specialised disciplines for induction of young talent in the system and improvement of its competitive edge.

NPA REDUCTION

• Net NPA ratio declined to 1.48% as at December-end 2004 from 2.37% as at March-end 2004 and 4.17% as at December-end 2003. Gross NPA declined to 6.24% as on 31.12.2004 from 8.66% as on 31.3.2004 and 9.94% as on 31.12.2003.
    
• Gross NPA amount declined to Rs.1297.79 crores as on 31.12.2004 from Rs.1418.46 crores as on 31.3.2004 and Rs.1459.14 crores as on 31.12.2003. Net NPA amount also declined to Rs.293.63 crores as on 31.12.2004 from Rs.362.83 crores as on 31.3.2004 and Rs.574.63 crores as on 31.12.2003.
    
• NPA Provision coverage ratio went up to 77.05% as at December-end 2004 from 73.75% as at March-end 2004. The coverage ratio was 60.34% as at December-end 2003.
  

BRANCH NETWORK

• The Bank has 1938 branches as on 31.12.2004, of which 960 are in Rural, 324 in Semi-Urban, 388 in Urban and 266 in Metropolitan areas. The Bank has also 140 Extension Counters spread all over India.
    

TECHNOLOGY NETWORK

• The Bank launched International Debit cum ATM card in association with Visa International to enable the cardholders to withdraw cash at over 8,70,000 VISA ATMs globally.
     
• The Bank has its own ATM switch for connectivity of the ATMs to provide on-line Any Time Any Where Banking facility to its valued customers in 32 major cities in our country. The Bank is also offering instant Fund Transfer Facility from 60 branches in 9 centres spread all over the country through its dedicated network through Structured Financial Messaging System (SFMS).
     
• The Bank is going ahead with its plan for implementing Centralised Banking Solution (CBS). It will also enable the Bank to meet customer expectations by offering a broad range of value added services through ATMs, mobile, Telephone, Internet, Call centres etc..
     
• On Line Tax Accounting System (OLTAS) has been implemented in 167 branches.

NEW INITIATIVES

• The Bank has projected a business growth of 27.4% for the current financial year. Total Business is estimated to exceed Rs.61,000 crores as at March-end 2005.
    
• The Bank is deputing a team of officers to Kazakasthan to formalize the business operation in joint venture with Punjab National Bank.
   
• For extending knowledge on modern techniques of agriculture, Krishi Prashikshan Kendras (Farmers' Training Centres) will be opened at the Bank's selected Lead Districts.
   
• Rural Kiosks are being set up for delivery of the Banking services at the door- step of the farmers.
    
• A dedicated IT training institute is being set up at Chandigarh for updating knowledge and skill of its Officers.
   
• The Bank is taking initiative to open specialised Agriculture Finance Branch in uttar Prdaesh to boost agriculture credit further.
    
• To improve the profitability, the Bank aims to improve quality of assets, reduce the Operating Expenses and also to reduce its Net NPAs to less than 1%.

KOLKATA,
18.01.2005