Allahabad Bank Sees Strong Q2FY14 Performance

Allahabad Bank has come out with robust set of numbers for Q2FY14. The bank reported a rise of 17.77% in its net profit to Rs 275.81 crore for the quarter ended September 30, 2013 from Rs 234.20 in the same period last year. Its total income grew 15.72% from Rs 4582.64 crore for Q2FY13 to Rs 5303.06 crore for Q2FY14.

The interest earned during the quarter ended September 30, 2013 was at Rs 4607.07 crore, up 7.63% from Rs 4280.5 crore for the same period a year ago. Surprisingly, the Non-Interest Income grew to Rs 695.99 crore, marking a year-on-year growth of 130.35% against Rs 302.14 crore in Q2FY12.

The Net Interest Income (NII) during the quarter increased to Rs 1309.07 crore from Rs 1174.29 crore during the corresponding period last year. The bank has made provisions of Rs 742.19 crore, up 59.91% from that of Rs 464.47 crore in the previous year same quarter.

The bank’s Net NPAs for the quarter came in at Rs 5047.76 crore as compared to Rs 2330.61 crore for Q2FY13, an increase of 116.59%. It reported a 99.72% YoY jump in the Gross NPAs, which came in at Rs 6613.28 crore against Rs 3311.35 crore in Q2FY13. On a QoQ basis, the Gross NPAs rose by 7.28%. The ratio of net non-performing assets (NPA) to net advances stood at 3.83% as on September 30, 2013, compared to 3.87% as on June 30, 2013 and higher than 2.1% as on 30 September 2012.

The Capital Adequacy Ratio (CAR) of the bank under the Basel III norms stood at 10.72% as on September 30, 2013.

Overall, Allahabad Bank reported healthy bottomline growth of 17.77% YoY. However, its net profits slumped by 33.23% on a QoQ basis. Despite the current challenges and tightened liquidity throughout the quarter, the bank has delivered a satisfactory quarter of financial performance. On the day of the results announcement (October 31, 2013), its shares gained 13.34% to touch Rs 91.75. We advise investors to stay invested in the counter.