Allahabad Bank – Scope for Improvement

Allahabad Bank reported a net profit of Rs1.6bn for Q4FY08, below expectations. However the NII at Rs4.4bn was inline with expectations. The operating performance deteriorated during the quarter with NII falling by 5%yoy. The fee income remained flat at Rs1.1bn due to high base effect on last year. With sharp jump in the Opex, the core operating profit has declined by 19.0% yoy. However, with higher treasury gains and lower tax rate, the net profit has grown by 35% yoy.

The asset quality continued to improve with gross NPA declining to 2.0% of assets (2.6% last year) and net NPA of less than 0.8 %