Allahabad Bank posts net loss of ~18.2 billion

Kolkata, 13 November

Allahabad Bank posted a net loss of ~18.22 billion for the quarter-ended September, against a net profit of ~702 million in the year-ago period. The bank expects to come out of Prompt Corrective Action (PCA) by June 2019, said S S Mallikarjuna Rao, managing director and chief executive officer.

The bank has assessed a capital requirement of about ~18 billion to maintain capital adequacy according to BaselIII norms. It expects to raise this through options such as QIP, LIC subscription and government capital infusion, said Rao.

The bank’s provisions shot up to ~23.56 billion in the quarter, against ~14.97 billion in the year-ago period.

“In agriculture, slippages are about ~8 billion. In the MSME sector, the forbearance of 180 days came to an end, and due to lack of cash flows, the accounts become NPAs. In UP and Maharsahtra, recovery is pending in cases where the waiver has not reached,” he said.

The bank expects NPAs of about ~8-10 billion from large corporate in the coming quarters, according to Rao. “We are confident of maintaining gross NPAs below 16 per cent and net NPAs below 6 per cent by March 2019. Accretion of NPA, with respect to big corporate, has peaked. There is only a small segment of ~8-10 billion, which might get NPAs in the next two quarters,” said Rao.

The gross NPA as a percentage of total lending stood at 17.53 per cent, as against 14.10 per cent in the year-ago period. “We recently received ~30.54 billion through capital infusion. This was to ensure the bank meets its Basel-III requirements,” he said.