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Allahabad Bank crosses Rs.125000 crore business

Allahabad Bank, one of the leading nationalized banks of the country celebrating 144 years of service to the nation, maintains its growth momentum in most of the performance parameters as evident from half yearly results of the Bank for the fiscal 2008-09. The trend of growth of business and profitability at the end of September’2008 half year continues to be steady.

The highlights of the performance for the half-year ended September 2008 are summarized as under:

The Business of the Bank stood at Rs.1,25,363 crores as on 30.09.2008 as against Rs.1,08,458 crores corresponding date previous year.
Year-on-Year basis, the Business increased by 15.59%.
Deposit of the Bank went up to Rs.73,648 crores as on 30.9.2008 from Rs.65,896 crores as on 30.9.2007 and Rs.71,616 crores as on 31.3.2008.
Year-on-Year basis, Total Deposits grew by 11.76%.
Gross Credit was Rs. 51,715 crores as on 30.9.2008 as against Rs.42,561 crores as on 30.9.2007 and Rs.50,312 crores as on 31.3.2008.
Year-on-Year basis, the Gross Credit increased by 21.51%.
Gross Credit to Total Deposit ratio stood at 70.22% as at Sept-end 2008 as against 64.59% as on 30.9.2007.
Operating Profit increased from Rs.588.42 crores during April-Sept'07 to Rs.620.94 crores during April-Sept'08, registering a growth of 5.53% during the period.
Net Profit of the Bank was Rs.135.04 crores during April-Sept'08 as against Rs.440.18 crores in the corresponding period last year.

(Decrease in Profit is mainly attributable to increased depreciation on Investment by Rs.448.90 crores due to general market scenario and Interest & Other Charges reversal on Agriculture Debt Relief & Debt Waiver by Rs.71.23 crores )
Gross NPA to Gross Advances further declined to 1.93% as at Sept-end 2008 from 2.40% as at Sept-end 2007 and 2.00% as at March-end 2008.
Net NPA to Net Advances ratio was 0.85% as at Sept-end 2008.
Capital Adequacy Ratio was 11.46% as at Sept-end 2008 which is above the stipulated norm of 9%.
Net Interest Margin (NIM) was 2.70% for the quarter ended 30.9.2008 as against 2.60% corresponding previous quarter.
Book Value per share was Rs.119.80 increased from Rs.109.57 as on 30.9.2007 and Rs.116.88 as on 31.3.2008.

Quarterly Focus points

Net Profit for the quarter ended Sept, 2008 was Rs.41.68 crores (Q-1 Rs.93.36 crores).
Gross Profit of the Bank was Rs.314.21 crores (Q-1: Rs.306.73 crores) compared to Rs. 299.55 crores during the second quarter of 2007-08 showing an increase of 4.89%.
Non-Fund Non-Interest Income during the second quarter of 2008-09 was Rs. 91.20 crores.
Operating Expenses to Average Working Funds remains steady at 1.49% during the quarter.
Establishment expenses to total expenses declined to 10.91% this quarter from 12.33% previous quarter and 11.50% of corresponding quarter of previous year.
Book Value per share increased from Rs.109.57 as on 30.9.2007 and Rs.118.88 as at June-end, 2008 to Rs. 119.80 as at 30.9.2008 (Q-2).

Branch Expansion

During the year from Sept., 2007 to Sept, 2008, 53 more branches were opened throughout the country taking the total number of branches to 2187 of which 988 (45%) are Rural, 416 (19 %) Semi-urban, 462 ( 21 %)Urban and 321 ( 15 %) Metropolitan.

Manpower & Recruitment

Total manpower strength of the Bank stood at 20508 as on 30.9.2008.
To meet the expansion requirement and need of specialized services, the Bank has already initiated process for recruitment of 550 Officers and 600 Clerical staff during the current financial year.

Social Banking

Priority Sector Credit grew from Rs.16,779 crores as on 30.9.2007 to Rs.17,869 crores as on 30.9.2008 registering an absolute growth of 1089.88 crores.
The outstanding Agriculture Credit increased from Rs. 7,805 crore as on September-end 2007 to Rs.8,092 crore as on September-end 2008 registering an absolute growth 286.61 crores.
Multi pronged strategy has been put in place to accelerate flow of credit to Agriculture Sector specially to farmers whose debts have been waived under the Agriculture Debt Waiver and Debt Relief Scheme, 2008. Under the Debt Waiver Scheme, Debts amounting to Rs.1041 crores were waived on 3.98 lacs accounts while under Debt Relief Scheme, relief were granted on 1.12 lacs accounts amounting to Rs.257 crores.
The Bank has planned to increase credit flow to Micro Finance Segments. For this purpose, flexible guidelines have been framed to scale up bulk lending to this sector for onwards lending to SHGs and Joint Liability Groups.
The Bank has launched a Scheme to meet the Total Financial requirement of SHG members raising their loan limits up to Rs.50,000/- per member with a maximum ceiling of Rs.5.00 lacs at 9% p.a. interest rate.
Initiatives have been taken to extend liberalized credit to Micro and Small Enterprises by way of collateralized free loans up to Rs.50 lacs under CGTMSE Scheme.

Fee Based Banking

In order to give boost to the NF/NI Income, the Bank has tie up arrangement with LICI and ECGC for selling of life and Export Credit insurance products. For Non-life insurance, the Bank has recently tied up with Universal Sompo General Insurance Company Ltd which will become effective from 1.11.2008. For Mutual Find products, Bank has tied up with 5 mutual fund companies like UTI-MF, Principal Pnb, Kotak MF, Reliance AMC and Franklin Templeton.
Bank is also promoting Group Life Insurance products for depositors, housing & educational loan borrowers in collaboration with LICI The Bank has also tied up recently with Tata-AIG Life for covering housing loan borrowers.
The Bank is offering Depository Services from 6 DPs and is in the process of launching on-line trading facility soon.
The Bank is offering various Cash Management Services through its network of QCS branches/centers/LCC Hubs extending collection and payment products to large number of banks and other clients.

Technology Initiatives

Bank has computerized all its 2187 Branches and 75 Extension Counters. covering 100% of Bank’s business.
Bank has started CBS implementation and 407 Branches and 4 Zonal Offices have been rolled over in CBS platform covering 63% of Bank’s business. Internet Banking, SMS Banking and e-Payment fragility for the customer of CBS branches has been launched.
211 ATMs have been installed with VISA and NFS connectivity. Bank has already issued more than 3.32 lacs VISA International ARM-cum-Debit card which can be used for transacting at more than 33000 ARMs and about 4 lacs POS terminals across the country.
450 branches are participating in Real Time Gross Settlement(RTGS) network.
Structural Financial Messaging System ( SFMS) is live in 457 Branches.
Bank has live NEFT in 450 branches.
Cheque Truncation System has been implemented in 62 branches under National Capital Region of Delhi

Risk Management Mechanism

In line with RBI directives, the Bank has adopted Standardized Approach for measuring credit risks, Basic Indicator Approach for operational risks and Standardized Approach – duration based – for Market risks towards implementation of Basel II norms.
The Bank is having a Comprehensive Risk Assessment and Management System. A Management framework has been set up to effectively identify, measure and manage risk elements of Credit, Market and Operational areas. In line with the best practice in industry, the Bank has evolved suitable risk management architecture comprising a Board-level Risk Management Committee.
The Bank is preparing itself for Advanced Approach under Basel II and is in the process of implementation of technology based Management Information System (MIS) covering all the branches/offices of the Bank.

Retail Banking

The Bank has bouquet of Retail Credit Products to cater to the personal, consumer and business needs of all sections of Society.
Amongst retail loan products, the Bank has unique online approval facility for Educational Loan. The Bank has sanctioned loans to 445 students amounting Rs.17.37 crores during the first six months of 2008-09.
Outstanding under Educational Loan has increased from RS.404.60 crores as on 30.9.2007 to Rs.560.35 crores as on 30.9.2008 registering a growth of 38.49%. The Bank has so far disbursed Education Loan to 35452 students totaling Rs.598.74 crores.
The Bank has a plan to go into insurance linked business in a bigger way in near future.

Human Resource Development

In order to augment the knowledge and motivational level of the Officers and employees, Bank exposed them to different internal, external and overseas training programmes. Besides, locational Training programmes, In-Company Training programmes are also conducted to meet the area specific demands of business.
Need-based training is imparted to the Executives, Officers and Staff members by the Bank at its training colleges and also in reputed Training Institutes.
As more and more branches are converted to CBS environment, 4 IT Channels are imparting CBS End Users Training and one more Channel at Hyderabad will start functioning soon.
During the period ending 30.09.2008, Bank has made substantial qualitative & quantitative improvement in the training and development of the Officers and employees and imparted training to 4897 persons( Officers-3920 & Staff-977) through its various channels.
To meet the challenges of the changing environment due to globalization and economic liberalization, the Bank initiated proactive steps for development of its Human Resources.
The Bank has been continuously exposing its executives, officers and staff members to need based training programmes at its 6 training colleges and also in reputed Training Institutes in India and abroad.

Customer Service

In order to bring about further qualitative improvement in Customer Service, Bank has stepped up its entire machinery. The following measures have been taken by the Bank in this respect :-
A Structured Complaint format has been made available in Bank’s Website.
In order to have a feedback on the quality of Customer Service being rendered by the branches, a Customer Service survey is being undertaken at select centers through an independent accredited agency.
Bank has adopted the Codes of Commitment to Customers for ensuring fair and transparent treatment to individual customers. Bank has also adopted Compensation Policy, Grievances Redressal Policy, Deposit Policy among others.

New Initiatives

Multi-city Cheque, Anywhere Banking and Offline Banking in CBS environment have been launched for the customers of CBS branches.

Accelerated expansion of CBS Platform to more branches.

The Bank has entered into the world of Net Banking and SMS banking.

The Bank continues to be on a steady growth path retaining its performing status in the Banking Industry and hopefully the position will be consolidated in the coming months in consonance with the confidence of our shareholders as also of our stakeholders.

Kolkata

18^th October, 2008.

Press Corner