Allahabad Bank Q2 net rises 8 pc to Rs 70 cr

Gladys Abbott
November 11, 2017

SBI Chairman Rajnish Kumar, who was named to his position just last month, has said tackling of bad loans would be a key priority, although the bank will not shy away from growth opportunities. "If you look at the bond yields, they have gone up in the recent past. The rate at which the slippage ratio has started coming down, we are hopefully in for some good times", Kumar said.

There may be 10-15 basis point spike following the issuance of recapitalisation bonds leading to an increase in yield, he said on the sidelines of an event organised by Business and Youth Starting Together here. The bank's asset quality, however, deteriorated as the amount of gross non-performing asset rose to Rs 21,454.27 crore during the period under review from Rs 19,094.53 crore in the same quarter last fiscal, according to a regulatory filing. The programme entails mobilisation of capital, with maximum allocation in the current year.

Sharp decline in slippages, jump in Net Interest Income (NII) in July-September quarter sent State Bank of India's stock soaring on the Dalal Street on Friday.

"Yes, this quarter we had some cushion available from the stake sale of SBI Life", he said.

However, the provision coverage ratio improved to 65.1%, an increase of 431 bps from June 2017.

The bank also made 92% of provisions of the first list of 12 cases that are referred to bankruptcy court and 75% for the second list of stressed accounts that may be referred to the bankruptcy court following directions from RBI.

More news: Aly Raisman Accuses Former USA Gymnastics Doctor Larry Nassar Of Sexual Abuse

Gross NPAs' ratio fell to 9.83 per cent from 9.97 per cent in the previous quarter. Total slippages as a ratio of the loan book declined to 1.85 percent from 5.37 percent sequentially. "During the quarter, fresh slippage to NPA category was around Rs 2,000 crore", the lender's Managing Director and CEO Usha Ananthasubramanian told reporters here. The stock market reacted positively to the improvement in asset quality.

Similarly, net NPAs rose to 8.84 per cent of net loans, from 8.59 per cent.

"We are focusing on recovery of bad loans".

Retail advances grew by 13 per cent to Rs 5,04,777 crore in September 2017.

"The idea is that we enhance our loss absorption capacity", he told reporters on a conference call, adding they aimed to further improve the provision coverage ratio as the banking sector moves towards worldwide accounting standards.

Other reports by LeisureTravelAid

Discuss This Article