Allahabad Bank looks to recover Rs 2,000 crore bad loans per quarter

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Kolkata | Updated: Jun 03, 2019 6:48 AM

In the March quarter last fiscal, fresh slippages stood at `2,819.40 crore, out of which agriculture and MSME contributed 31.44% and 28.03%, respectively.

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State-run Allahabad Bank is aiming to recover around `2,000 crore of bad loans per quarter during the current fiscal to cut its high non-performing asset level.

The lender’s gross non-performing assets (NPAs), in absolute terms, stood at `28,704.78 crore at the end of the fourth quarter last fiscal, while gross NPA as a percentage of total loans was at 17.55% during the same period. The bank came out of the prompt corrective action (PCA) framework of the Reserve Bank of India (RBI) in February.

In its annual report for the financial year 2018-19, the city-based bank said that for effective and timely monitoring of NPA accounts and follow up of due process in NPA accounts, having ledger balance of `1 crore and above, concept of SAMV (Stressed Asset Management Vertical) has been introduced at head office level as well as field level with dedicated executives.

“Dedicated SAM verticals are in place to ensure recovery of around `2,000 crore per quarter,” bank’s MD & CEO S S Mallikarjuna Rao said on its forward and future strategies. Rao expects fresh slippage to be moderate and be contained at approximately 1% per quarter.

In the March quarter last fiscal, fresh slippages stood at `2,819.40 crore, out of which agriculture and MSME contributed 31.44% and 28.03%, respectively. The bank reported widening of its net loss to `3,834.07 crore for the March quarter of FY19 against a net loss of `3,509.63 crore for the same period of FY18, due to a rise in provisions to cover bad loans.

The bank had launched a campaign, ‘Each One Reach One’, in November last year, exhorting all its employees through zonal managers and field general managers to actively participate in endeavouring for recovery in NPAs, write-offs and SMA (Special Mention Account) accounts for up-gradation/closure and arresting the slippages.

“During the current financial year efforts for recovery have been enhanced through ‘Each One Reach One’ to achieve recovery targets positively,” the MD informed in its annual report published on Saturday.

On the capital raising plan for this fiscal, Rao said the bank will be requiring to augment growth capital during the year and had obtained board approval for raising equity capital up to `4,000 crore through various modes. The lender’s CRAR as on March 31, 2019 was 12.51%, out of which CET1 was 9.65% and AT1 was 0.03% and Tier-II CRAR was 2.83%.

The bank will seek its shareholders’ approval for raising equity capital through QIP/ FPO/ Rights Issue, among others. Allahabad Bank’s annual general meeting is scheduled on June 28.

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