Date:27/04/2005 URL: http://www.thehindubusinessline.com/2005/04/27/stories/2005042700980600.htm

Back Allahabad Bank biz crosses Rs 63,000 cr

Our Bureau

Mr O.N. Singh, CMD, Allahabad Bank (right) and Mr S.K. Goel, Executive Director, addressing a press conference in Hyderabad on Tuesday. - - A. Roy Chowdhury

Hyderabad , April 26

ALLAHABAD Bank has crossed Rs 63,000-crore-mark in business for the fiscal ended March 2005, recording a year-on-year growth of 31.6 per cent compared with a growth of 22.9 per cent recorded in the previous fiscal.

Announcing this here at a press conference immediately after the board meeting on Tuesday, the Chairman and Managing Director, Mr O.N. Singh, said the total deposits grew by 29.5 per cent to Rs 40,767 crore, while gross advances improved by 35.7 per cent at Rs 22,236 crore.

According to Mr Singh, the bank, which would firm up its audited financial results next week, expects an increase of 20 per cent in operating profit at around Rs 1,100 crore compared with Rs 876 crore in the previous fiscal.

It expects a net profit of around Rs 550 crore (Rs 463 crore). Buoyed by the recent successful public offering, the bank has chalked up a corporate plan for the current fiscal.

It plans to achieve Rs 80,000-crore business for the current fiscal, a growth of 27 per cent, Rs 51,000 crore of deposits, an increase of 25.1 per cent, and Rs 29,000 crore of gross credit, recording a growth of 30.4 per cent over the figure of 2004-05. The bank expects to post an operating profit of around Rs 1,200 crore and a net profit of over Rs 800 crore for the current fiscal, Mr Singh said. Having reduced its gross and net NPAs to 6 per cent and 1.5 per cent, respectively with the help of aggressive recoveries of over Rs 408 crore during last fiscal, the bank now aims at further reducing the gross NPAs to below 5 per cent and net NPAs to below 1 per cent.

The bank has drawn up a major revamping and business process reengineering (BPR) programmes for which it has engaged the services of Ernst & Young. Mr Singh said E&Y would extend its expert guidance and counsel for formulating IT strategy and BPR needs and suggesting training needs and implementation of centralised banking solution. As a part of this, E&Y has suggested two major business models for the bank's subsidiary — AllBank Finance Ltd. While the first one was focussed on non-fund-based business, the second model suggested entry into the insurance sector. Stating that SBI was the

only public sector bank in the country that entered the insurance sector, Mr Singh said Allahabad Bank would firm up its business model in a month.