Allahabad Bank seeks infusion of Rs 1,000 crore

Written by fe Bureau | Updated: Jun 24 2014, 07:38am hrs
Allahabad Bank has sought capital infusion worth R1,000 crore from the Central government for this fiscal to boost its capital adequacy.

We have sought capital support worth R1,000 crore from the government for the current fiscal, a senior official of the public sector bank told FE.

He said the bank would decide later on which route the capital infusion from the government could take place.

The capital infusion will help the city-based lender to shore up its capital adequacy ratio. Its capital adequacy ratio as per Basel III fell to 9.96% during the fourth quarter last fiscal from 10.46% in the third quarter.

The state-run bank is also awaiting the finance ministrys approval to allow it to raise R320 crore of equity capital through a qualified institutional placement (QIP). The bank had got the shareholders approval for the QIP for shoring up its equity base in December last year.

Allahabad Bank reported a 25% year-on-year jump in its net profit for the March quarter of the last financial year to R157.75 crore from Rs 126.15 crore for the same period a year ago, buoyed by higher interest income.

On a sequential basis, its net profit during the quarter, however, fell 51.51% from R325.36 crore in December quarter, mainly due to higher provisioning.

The lenders gross non-performing assets (NPAs) as a percentage of total advances rose to 5.73% during the fourth quarter last fiscal from 5.47% during third quarter. Its gross NPA ratio stood at 3.92% in fourth quarter of FY13.