Kolkata-based Allahabad Bank has reported a 83% fall in net profit at Rs 41.68 crore for the quarter to September 30, 2008 compared with Rs 239.78 crore for the corresponding period last fiscal, as it provisioned Rs 272 crore for the period underreview.
The bank has made a provision of Rs 110.10 crore for bad debt, including reversal of Rs 45 crore. Provision for depreciation on investment is Rs 138.45 crore compared with Rs 12 crore for the same period last year.
“Last year, we had made a provision of Rs 60 crore. This year, we have made a provision of Rs 272 crore,” said KR Kamath, chairman and managing director of the bank.
Net income of Allahabad Bank has touched Rs 1977.19 crore during the second quarter this fiscal against Rs 1664.28 crore. Net interest margin for the quarter was 2.7% against 2.6% for the corresponding period last fiscal.
Business of the bank crossed Rs 1,25,000 crore on September 30, 2008 against Rs 1,08, 458 crore.
“The bank has taken a very conscious decision to contain high-cost deposits and they have come down by Rs 1,200 crore between March and September this fiscal,” said Kamath.
He said the bank is not looking at revising interest rates immediately. “Time is not ripe to declare a rate-cut because the liquidity has come in the market after various measures were taken by the government. If liquidity measures help to bring down the cost of deposits then interest rates would come down.”
According to him, with the inflation hovering around 11.5%, it will give negative return to the depositors. “There is a need to protect the interests of the depositors also,” hesaid.