KOLKATA: State-run Allahabad BankBSE
2.53 % said it will raise Rs 320 crore of equity in qualified institutional
placement (QIP), but is in no hurry to do so since the government's plan to
infuse Rs 400 crore this fiscal will help it keep its capital adequacy ratio
(CAR) level above the 9% regulatory stipulation.
"If market condition is good,
we can take the QIP route this year itself. Else, we will raise it next
year," bank chairperson and managing director Shubhalakshmi Panse said on
Thursday, after announcing an 18% rise in second quarter profit. Panse said
that with the capital infusion by the government, the bank will be comfortably
placed capital wise, even under the stricter Basel III parameters. As on
September 30, the bank's CAR was 11.07% under Basel II and 10.72% under Basel
III rules.
When market conditions are better,
the bank will get a better premium on its equity from the qualified
institutional investors. The Allahabad Bank stock closed atRs 91.75, up 13.3%
on the BSE on Thursday on fresh buying as the bank's profit numbers beat Street
expectations.
The net profit for the September
quarter was Rs 276 crore compared with Rs 234 crore in the year-ago period.
Operating profit grew 44% to Rs
1,154 crore from Rs 802 crore. Panse attributed the rise in profit to improved
recovery performance, effective management of investment portfolio which helped
minimise mark-to-market losses and the reduction in cost of deposit.
Improvement in these parameters has
helped the bank better its net interest margin to 2.75% from 2.30% a year back.
The bank has recovered Rs 2,573
crore during the second quarter, seven times more than what it managed a year
back. It was also able to contain fresh slippage to Rs 1,200 crore compared
with Rs 1,720 crore last time. The bank has written off assets worthRs 732
crore to asset reconstruction companies at 50% discount to push up recovery and
non interest income.
Its gross non performing assets ratio however continued to deteriorate to 4.94% at the end of September quarter from 2.95% a year back. Net NPA ratio also slipped to 3.83% from 2.10%.
The bank has shifted investments
worth Rs 7,961 crore to held-to-maturity from available-for-sale portfolio and
minimise its mark-to-market losses to Rs 61 crore. Panse said the bank has
consciously slowed term deposit mobilisation to rein in cost of deposit to
7.24% from 7.25%.
Source- Economic Times
By
Shah Mohammad Abdul Qadir
PGDM 1st Semester
IIMT College Of Management
Greater Noida. UP
KOLKATA: State-run Allahabad BankBSE 2.47 % said it will raise Rs 320 crore of equity in qualified institutional placement (QIP), but is in no hurry to do so since the government's plan to infuse Rs 400 crore this fiscal will help it keep its capital adequacy ratio (CAR) level above the 9% regulatory stipulation.
"If market condition is good, we can take the QIP route this year itself. Else, we will raise it next year," bank chairperson and managing director Shubhalakshmi Panse said on Thursd ..
Read more at:
http://economictimes.indiatimes.com/articleshow/24993726.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
KOLKATA: State-run Allahabad BankBSE 2.47 % said it will raise Rs 320 crore of equity in qualified institutional placement (QIP), but is in no hurry to do so since the government's plan to infuse Rs 400 crore this fiscal will help it keep its capital adequacy ratio (CAR) level above the 9% regulatory stipulation.
"If market condition is good, we can take the QIP route this year itself. Else, we will raise it next year," bank chairperson and managing director Shubhalakshmi Panse said on Thursd ..
Read more at:
http://economictimes.indiatimes.com/articleshow/24993726.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
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