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Allahabad Bank hopes to recover Rs 400 cr

Our Bureau

CHENNAI, Nov. 3

ALLAHABAD Bank has set itself a target for recoveries of Rs 400 crore this year. Last year, the bank's recoveries of loans from delinquent accounts was around Rs 280 crore.

However, last year, fresh accretion of non-performing assets exceeded recoveries. But this year, the trend is the reverse, according to Mr K.K. Rai, Executive Director of the bank.

He told Business Line that because of better recoveries and a pick up in retail credit, the bank expects to post a higher profit in the current year. Last year, the bank made a net profit of Rs 40 crore.

The bank's `Retail Banking Boutiques' (RBBs) have so far disbursed Rs 671 crore up to September, of which around Rs 250 crore was done in the current year. Mr Rai expects another Rs 250 crore of retail credit in the remaining months of the year.

In March the bank had 106 RBBs. ``Enthused by the success of the RBBs, the bank has decided to increase the number of RBBs to 200 by March 2002,'' he said.

He said the bank had also increased attention on earning fee-based income. Last year, the bank's fee-based income was Rs 143 crore. In the first half of the current year, the bank has already crossed Rs 95 crore. Mr Rai expects at least a 10 per cent gro wth in fee-based income this year.

He said that the bank had raised Rs 95 crore by way of Tier-II capital last month, which has taken the capital adequacy to 10.5 per cent.

``With this, we can increase our assets (advances) by another Rs 1,000 crore,'' he said. Mr Rai does not foresee any need for further capital for a few more years.

Statistics made available by the bank say that the aggregate deposits of the bank stood at Rs 22,436 crore as on September 30, 2001, as against Rs 20,106 crore on March 31, 2001.

Gross advances as on September 30, stood at Rs 10,624 crore, up from Rs 10,316 crore as on March 31, 2001. However, food credit to the Union Government alone increased by Rs 200 crore this year.

The bank has installed 33 ATMs all over the country -- the 33rd ATM was inaugurated here on Saturday. The bank proposes to operationalise another 11 ATMs shortly. The bank had no plans to rationalise its branch network. The Allahabad Bank has 1,906 branc hes, of which 959 are in rural areas, 320 in semi rural, 361 in urban and 266 in metro cities, he said.