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Allahabad Bank Q2 loss widens to Rs 2,103 crore, stock plunges 11%

BusinessToday.In     November 8, 2019

Public sector lender Allahabad Bank on Friday reported a consolidated net loss of Rs 2,103.19 crore for the second quarter ended September 30, 2019, widening from a net loss of Rs 1,816.19 crore in the same quarter previous year.

"The bank had posted consolidated net profit of Rs 132.88 crore in the June quarter," Allahabad Bank said in a filing to the Bombay Stock Exchange.

Total income of the bank rose 5.18 per cent to Rs 4,725.23 crore as against Rs 4,492.23 crore in the same period a year ago. However, on the quarter-on-quarter basis, the total income was down 2.19 per cent compared to Rs 4,831.12 crore in the June quarter.

Allahabad Bank's net interest income (NII), or the core income a bank earns by giving loans, rose 10.9 per cent to Rs 1,275.7 crore in July-September quarter of FY20 as against Rs 1,150.5 crore in the same quarter last fiscal.

The other income (non-interest income), including core fee income, rose sharply to Rs 600.61 crore against Rs 480.80 crore in the same period last year.

During the July-September period of this fiscal, the bank's operating profit (before Provisions & Contingencies) increased to Rs 646.51crore from Rs 542.87 crore in the year-ago period.

The provisions and contingencies of Allahabad Bank rose by 16.32 per cent to Rs 2,740.59 crore as compared to Rs 2,356.03 crore made in the year-ago quarter. The bank's provisions, stood at Rs 1,008.81 crore in June quarter.

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The bank has made additional provision of Rs 749.51 crores as at March 31, 2018. Hence, for the FY19 and half year ended September 30, 2019 no additional provisioning was required to be made as per the said RBI guidelines. During the quarter Bank has made additional provision of Rs 1982.41 crore over and above the provisions required to be made in terms of prudential norms issued by RBI, it said.

Allahabad Bank's asset quality declined during September quarter, as gross non-performing assets (NPAs) ratio increased to 19.05 per cent, versus 17.53 per cent in the year-ago quarter. Net NPA, however, fell to 5.98 per cent from 7.96 per cent in the corresponding quarter last year. The bank's absolute gross NPA stood at Rs 31,467.53 crore in Q2FY20 against Rs 27,236.19 crore in Q2FY19.

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For the half year ended September 30, 2019, the bank has reported 380 cases of operational fraud involving a total amount of Rs 85.38 crore. Out of these accounts, the bank has recovered a total amount of Rs 19.01 crore, while no provision is written back during the current quarter, the bank said.

Following Q2 earnings, Allahabad Bank shares fell upto 11.2 per cent to Rs 23.95 per share in the on the BSE. Paring some of the losses, the share price ended 3.52 per cent lower at Rs 26.05 apiece on the BSE on Friday.

Edited by Chitranjan Kumar

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