Allahabad Bank posts big loss on higher provisioning for bad loans

Allahabad Bank on Tuesday posted June-quarter loss of Rs 1,944 crore against a profit of Rs 28.8 crore a year ago. The interest earned by the bank during the first quarter stood at Rs 4,600 crore, compared with Rs 4,148 crore in the same period of the previous financial year.

Provisions and contingencies rose to Rs 2,763 crore during the April-June quarter, from Rs 1,335 crore in the year-ago period. Provisions for non-performing assets (NPAs) during the quarter came in at Rs 2,950 crore versus Rs 1,687 crore a year ago

Gross NPAs stood at 15.97% of the total advances against 15.96% in the previous quarter, while Net NPAs were at 7.32% against 8.04%.

On Friday, State Bank of India (SBI) posted a loss for the third consecutive quarter after setting aside funds to cover losses on its bond portfolio and increased gratuity. The country’s top lender by assets turned to a loss of Rs 4,875.85 crore in the June quarter, from a net profit of Rs 2,005.53 crore a year earlier. 

The bank’s gross NPAs rose to 10.69% of total advances in the June quarter, from 9.97% a year earlier, and 10.91% in the March quarter. Another public sector lender, Punjab National Bank (PNB), which reported a $2-billion fraud in February, also declared a June-quarter loss of Rs 940 crore, against a profit of Rs 343 crore a year ago. Recovery of non-performing assets, cost-cutting measures including shuttering international and domestic branches and better loan margins helped the bank improve on its March quarter performance, where it had reported a record loss of Rs 13,417 crore.

The central government on Monday gave the Central Bureau of Investigation (CBI) and the Reserve Bank of India (RBI) the go ahead to prosecute and initiate criminal charges against former Punjab National Bank (PNB) managing director and chief executive officer (CEO) Usha Ananthasubramanian.

Ananthasubramanian, who was the CEO of Allahabad Bank, was on Monday removed from service with immediate effect, according to people familiar with the development. Allahabad Bank board had earlier stripped Ananthasubramanian of all executive powers after the CBI had named her in the scam.

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Bank of India(BoI) may get new MD soon

State Bank of India (SBI) managing director B Sriram is likely to be appointed to the same position in Bank of India (BoI) while BoI managing director Dinabandhu Mohapatra may be asked to move to Allahabad Bank, said sources.

The buzz over these appointments were triggered by Bank of India's disappointing quarterly results on Monday. The bank reported a fourth-quarter net loss of Rs 3,969.27 crore, more than double of the Rs 1,045.52 crore loss posted in the same quarter last year.

The bank's asset quality worsened and its provisions increased in the March quarter, ending the fiscal of 2017-2018. The Bank of India posted their total provisions at Rs 6,674.12 crore from the Rs 4,736.21 crore a year ago in the corresponding quarter. The share for non-performing assets, out of the provisions, was Rs 6,699.23 crore in the fourth-quarter, weakened as compared to the year-ago period.

The bank's income in the fourth quarter slipped to Rs 2,563.85 crore from the Rs 3,469 crore in the year-ago period.India's banking sector has been facing the NPAs problem at large. The Reserve Bank of India (RBI), last year, had released a list of large defaulters, in which state-run banks were among those that lent the maximum to such defaulters.

The debt-laden companies are still facing their insolvency procedures under the Insolvency and Bankruptcy Code (IBC). The State Bank of India, though posted a major loss in the March quarter, posted a guidance that it is on a recovery path from the banking sector's bad loan mess - making it a plausible reason for the government to choose the SBI chief to head the NPA-stricken state-run bank.

SBI, in its media briefing, said the recognition of the NPA has been completed and that the bank is fully compliant with RBI's February 12 circular.The coverage ratio for National Company Law Tribunal's (NCLT) second list, the bank claims, stands at 75% and the lender is not expecting the loss to exceed 53% for the first list of defaulters. The bank expects the haircut to be 52% for the first NCLT list.

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Allahabad Bank chief relieved of CEO duties

Public sector lender Allahabad Bank May 15 relieved its Managing Director and Chief Executive Officer Usha Ananthasubramanian of her post with immediate effect.

“The Board of Directors of the Bank in its meeting held on the date has decided that Usha Ananthasubramanian, MD & CEO be divested of all functional responsibilities of the Bank with immediate effect,” said the bank in a statement to the exchanges.

The bank also requested the Finance Ministry to make suitable arrangements for its smooth functioning after this decision. She is set for superannuation on September 30, 2018.

Central Bureau of Investigation (CBI) filed a chargesheet against current and former officials of Punjab National Bank (PNB) and  Allahabad Bank, the Finance Ministry has directed both the banks’ boards to 'divest' these officials of their powers.

The chargesheeted officials include Usha Ananthasubramanian, who was also the former chief of Punjab National Bank. She has been named by the CBI in the charge sheet relating to the Rs 14,000 crore-plus fraud at PNB unearthed in mid-February.

Who is Usha Ananthasubramanian?

Ananthasubramanian (57), was at the helm of PNB from August 2015 to May 2017 after serving as its Executive Director from July 2011 to November 2013.

She took charge of PNB at a time when the bank was struggling under a heap of bad loans while being under the RBI’s scrutiny for deterioration in asset quality.

At that time, Ananthasubramanian took an aggressive stance on PNB’s non-performing assets (NPAs) and wilful defaulters. She also refused to take a haircut on loans to the notorious Vijay Mallya’s Kingfisher Airlines.

Later, she was moved to lead Bharatiya Mahila Bank, India’s first and only government-owned women’s bank, which got merged with State Bank of India in April 2017.

After that, in May she was moved to Allahabad Bank as the MD and CEO and completed a year at the state-owned bank on May 5.

Source- Moneycontrol

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Allahabad Bank reports huge net loss in Q4 on NPA rise

Public sector lender Allahabad Bank on Friday reported a standalone net loss of Rs3,509.63 crore for the last quarter ended March of 2017-18 due to more than three-time rise in its provisions for bad loans.

The bank had registered a net profit of Rs111.16 crore in the same quarter of preceding fiscal 2016-17. The bank had reported a loss of Rs1,263.79 crore in the previous December quarter. The provisioning for bad loans spurted to Rs5,126 crore during the March quarter against Rs1,489.88 crore in the year-ago quarter, according to the regulatory filing by the bank.

Income during the quarter also fell to Rs4,259.37 crore from Rs5,105.07 crore as also interest income declined to Rs3,776.81 crore from Rs4,372.18 crore in January-March 2017. For the entire 2017-18, net losses widened to Rs4,674.37 crore from Rs313.51 crore in 2016-17.

Total income declined to Rs19,051.05 crore in FY2017-18 from Rs20,304.72 crore in the previous fiscal. On consolidated basis, the full year net loss rose to Rs4,574.22 crore from Rs279 crore year ago. Income decreased to Rs19,487.51 crore from Rs20,578.94 crore in FY2016-17.

The provisioning amount for NPA for the year grew to Rs10,326.45 crore from Rs4,552.37 crore year ago fiscal. The bank said it has not declared any dividend for financial year 2017-18. The bank’s non-performing assets (NPAs) reached 15.96% of gross advances by end of March 2018 from 13.09% in year ago same period.

Gross bad loans were to the tune of Rs26,562.79 crore as of March 2018 against Rs20,687.83 crore in March 2017. Net NPA ratio, however, fell to 8.04% (Rs12,229.13 crore) from 8.92% (Rs13,433.51 crore).

Allahabad Bank said the board of directors have approved raising of equity capital aggregating up to Rs1,900 crore through various modes. The Kolkata-headquartered lender said that is has merged its wholly owned subsidiary AllBank Finance Ltd with itself with effect from 14 March 2018.

Among others, it said the bank reported 43 fraud cases in 2017-18 involving a total amount of Rs1,525.35 crore. “Out of these accounts, the bank has recovered a total amount of Rs 2.76 crore and made a total provision for balance amount of Rs 1,522.59 crore during the year. The quantum of unamortised provision debited from ‘other reserves’ as at the end of year amounting to Rs 390.58 crore in pursuance to RBI norms...as the provision for fraud can be amortized over a period of four quarters,” the bank said.

Besides, in respect of two gems and jewellery borrower groups, where fraud was declared by some banks, Allahabad Bank has fully provided for the entire funded exposure, it said. Also, the bank said it has made additional provision of Rs672.61 crore as on 31 March 2018 in respect of certain NPA accounts covered under the provisions of Insolvency and Bankruptcy Code (IBC).

On the divergence on asset classification and provisioning for NPAs as per RBI’s risk assessment report (RAR), the lender has shown a gap of Rs1,077.80 crore in gross NPA for 2016-17; for net NPAs it is Rs925.40 crore.

The bank had reported a net loss of Rs313.52 crore in 2016-17, however, taking into account the Rs152.40 crore divergence in provisioning, the adjusted net loss for the said fiscal comes in at Rs465.92 crore.

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After PNB, SBI, now Union Bank of India hit by bank fraud

The Central Bureau of Investigation (CBI) registered a Rs1,394.43 crore bank fraud case against Hyderabad-based Totem Infrastructure Ltd on a complaint by state-run Union Bank of India.

“The CBI registered a case today (Thursday) on a complaint by Union Bank of India against Totem Infrastructure and its promoters and directors Tottempudi Salalith and his wife Tottempudi Kavita of Hyderabad,” a person familiar with the developments said.

The number of bank fraud cases has been piling up after the Reserve Bank of India (RBI) directed banks to file complaints against erring companies. The latest case comes just a day after the investigating agency filed a case of loan fraud against Kanishk Gold Pvt. Ltd on a complaint by State Bank of India (SBI).

Union Bank of India’s industrial finance branch of Hyderabad filed the complaint against Totem for cheating the bank to an extent of Rs313.84 crore.

“Totem Infrastructure took a loan from a consortium of eight banks, including Union Bank, wherein the total outstanding dues stand at Rs1,394.43 crore. This account became NPA (non-performing asset) on 30 June 2012,” the person added.

The agency said that Union Bank of India had only recently filed a complaint with the agency against Totem Infrastructure.

It was alleged in the complaint by Union Bank that “the company had diverted funds by opening accounts outside the consortium and through payments of wages by showing excess expenditure and inflated stocks. The entire sale proceeds were not allegedly routed through the dealing branches of consortium banks.”

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More Indian banks entangled in PNB fraud

At least three more Indian banks – two from the public sector and one private – are likely to have been caught in the Rs 11,000-crore fraud that hit the Punjab National Bank(PNB) on Wednesday. 

Union Bank of India, Allahabad Bank and Axis Bank are said to have offered credit based on letters of undertaking (LOUs) issued by PNB.

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Allahabad Bank reports Q3 loss as bad loans rise

State-owned Allahabad Bank on Wednesday reported a net loss of Rs1,263.79 crore in the December 2017 quarter compared to a net profit of Rs75.26 crore a year ago as bad loans mounted and provisions soared.

However, the loss was limited due to a tax write-back of Rs227.50 crore during the quarter. In the year-ago quarter, it had a tax write-back of Rs108.05 crore. Asset quality worsened further. Provisions and contingencies surged 169.32% to Rs2413.46 crore from Rs896.13 crore a year ago.

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RBI puts another PSB under PCA

Allahabad Bank on Wednesday said the Reserve Bank of India has put the lender under prompt corrective action framework post an on-site inspection of high NPAs and negative return of assets for fiscal 2016-17.

"We have to inform you that the Reserve Bank of India vide letter dated January 2, 2018 received by the bank on date has placed the bank under Prompt Corrective Action Framework, consequent to the on-site inspection under the Risk Based Supervision Model carried out for the year ended March, 2017," the bank said in a regulatory filing.

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Allahabad Bank Q2 result, net profit rises 8%

State-owned Allahabad Bank today posted a 7.9 per cent rise in net profit atRs. 70.20 crore for the September quarter despite a rise in non-performing assets (NPAs).

The Kolkata-headquartered bank had registered a net profit of Rs. 65.03 crore in the July-September quarter of the previous financial year.

Total income remained flat at Rs. 5,067.78 crore during the quarter as against Rs. 5,051.61 crore in the same period a year ago, the bank said in a statement.

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Allahabad Bank Q1 result, reported net profit of Rs 29 crore

State-run Allahabad Bank reported Rs 29 crore net profit for the first quarter riding on steady rise in treasury income and commission earned as well as on lower provision. 

This is the second straight quarterly profit for the bank after a lackluster last fiscal. It had reported Rs 565 crore loss in the year ago period while made net profit of Rs 111 crore in the fourth quarter. 

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Preparation of Merger of PNB and Allahabad Bank

Two government banks, who are facing a debt crisis, are expected to get relief soon. According to information from the sources, the government has almost completed the preparations for the merger of PNB and Allahabad Bank . The merger of both banks can be effective till 1 April 2018 and the merger process will be completed by December 2017. This merger will benefit Allahabad Bank's investors much more. Under merger, Allahabad Bank will get two shares of PNB instead of 3 shares.

Under the merger, Allahabad Bank will reduce its NPA from Rs 7,000 crore to 5000 crore rupees.Allahabad Bank has bid for selling NPA of Rs 1641 crore At the same time, PNB can also sell an NPA of 11000-13000 crores to ARC. Also plans to sell PNB non-core assets.

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Allahabad Bank Q4 result, posts profit of Rs111 crore

Public sector Allahabad Bank swung into the black, registering a net profit of Rs111.16 crore during the last quarter ended March 2017 as provisions for bad loans came down. The bank had posted a net loss of Rs581.13 crore during the corresponding quarter of preceding fiscal due to RBI’s prudential norms on asset classification requiring banks to provide for a higher coverage for bad loans.

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Government demotes two top chief executives of Punjab National Bank and Bank of India

Sunil Mehta has been appointed to head Punjab National Bank, the country's second largest public sector bank, in place of Usha Ananthasubramanian, in a series of changes at public sector lenders. Dinabandhu Mohapatra has been promoted as chief executive officer of Bank of India, replacing Melwyn Rego. 

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Govt ask 10 public sector bank to cut staff benefits

The government has asked 10 public sector banks (PSB) to curtail employee benefits, including industry-standard pay hikes, if these want to receive any capital.The Centre wants these banks to sign a memorandum of understanding (MoU) with the employees’ unions to get a commitment on this. If the unions agree, benefits such as leave travel concessions and perks could go for a few years till the banks returned to health.

All three Kolkata-based banks — United Bank of India, UCO Bank and Allahabad Bank — have got this diktat. The letter has also gone to Indian Overseas Bank, Vijaya Bank, Bank of India, Central Bank of India, Andhra Bank, Bank of Maharashtra and Dena Bank, sources said.

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Allahabad Bank Q3 result, net profit at Rs75.26 crore

Allahabad Bank on Monday reported a net profit in the December quarter as compared with a loss in the year-ago period, owing to lower provisions against bad loans and higher other income.

The state-owned lender reported a net profit of Rs75.26 crore in the third quarter as compared with a loss of Rs486.14 crore a year ago. Net interest income (NII), or the difference between interest earned on loans and that spent on deposits, fell 16.44% on a year-on-year basis to Rs1,183.31 crore. Other income, though, rose by 77% from a year-ago period to Rs729.87 crore.

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Allahabad Bank Q2 result, profit down 63% Rs 65 cr

Allahabad Bank   's net profit fell over 63 per cent to Rs 65.03 crore for the September quarter as the lender parked aside a significant amount to meet bad loans and contingencies, while income decreased. 

The Kolkata-headquartered bank had registered a net profit of Rs 177.10 crore in the July-September quarter of the previo

us financial year, 2015-16. Its total income decreased to Rs 5,051.61 crore during the second quarter of 2016-17 as against Rs 5,317.06 crore in the same period a year ago, the state-owned bank said in a regulatory filing.

As per RBI's guidelines on cleaning-up bad assets, lenders have been keeping aside higher amounts towards non-performing assets (NPAs) or bad loans, which is mainly responsible for majority of the public sector banks reporting lower profits or losses.

"In compliance with RBI directives on asset quality review (AQR), Bank has made incremental quarterly provision of Rs 41.46 crore (Rs 87.80 crore in the half year at 5 per cent of the outstanding amount) in CDR restructured standard accounts for the quarter ended September 30, 2016," it said. For quarter under review, Allahabad Bank's provision for bad loans and contingencies was up at Rs 814.40 crore, as against Rs 703.10 crore a year ago. 

Gross NPAs rose to 12.28 per cent of gross advances as on September 30, 2016, up from 5.26 per cent a year earlier. Net NPAs soared to 8.59 per cent of net loans, from 3.61 per cent year ago. In absolute terms, gross NPAs were at Rs 19,094.53 crore against Rs 7,985.75 crore. While, net NPAs were at Rs 12,800.45 crore, up from Rs 5,359.90 crore.

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Allahabad Bank Q1 Result, Posts Rs 564.96 crore loss

Allahabad Bank on Friday reported a Rs.564.96 crore net loss for the quarter ended June against a Rs.146.86 crore net profit a year ago.

The bank made provisions of Rs.1,330.78 crore for the quarter compared with Rs.854.79 crore a year ago. Its operating profit declined to Rs.967.44 crore in the April-June period from Rs.1,241.50 a year ago. Loan provision coverage ratio stood at 46.03% as on 30 June.

According to a Bloomberg poll of four analysts, the bank was expected to post a net loss of Rs.15.27 crore for the June quarter.

Net interest income decreased to Rs.1,393.2 crore for the June quarter compared with Rs.1,587.11 crore a year ago.

Gross non-performing assets (NPAs) rose to Rs.19,208.62 crore from Rs.7,987.44 crore a year ago.

As a percentage of total loans, gross NPAs stood at 12.33% at the end of the quarter, compared with 9.76% in the previous quarter and 5.29% in the year-ago quarter. Net NPAs stood at 8.69% for fiscal first quarter compared with 3.67% last year.

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Allahabad Bank posts Q4 net loss of Rs 581 cr

Public sector Allahabad Bank on May 13 reported a net loss of Rs 581.13 crore for the last quarter ended March 2016 as it substantially raised the amount towards bad loans provisioning in accordance with RBI's asset quality directives.

The Kolkata-headquartered lender had made a net profit of Rs 202.63 crore in the January-March quarter of 2014-15. The bank almost quadrupled the provisioning and contingencies amount to Rs 2,487.15 crore for the quarter ended March 2015-16, as against Rs 631.11 crore kept aside for the same period a year ago. 

Also, the total income of the bank fell to Rs 5,051.38 crore in the quarter to March 2015-16, from Rs 5,390.71 crore earned a year ago, it said in a regulatory filing. Bad loans problem also reflected on overall performance of the Bank, as it suffered a net loss of Rs 743.31 crore in 2015-16. 

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Allahabad Bank Posts Rs 486-Crore Loss in Q3

Public sector Allahabad Bank on Tuesday reported a loss of Rs 486.14 crore for the third quarter ended December 31, due to higher provisioning against bad loans.

The bank had earned a net profit of Rs 164.11 crore in the same quarter last year. Total income also declined to Rs 5,030.19 crore during the quarter from Rs 5,386.79 crore in the previous fiscal.

Gross NPAs as a percentage to total advances rose to 6.40 per cent from 5.46 per cent in the same quarter year ago.

Net NPAs went up to 4.23 per cent from 3.89 per cent at the end of December 2014.

Total provisions, excluding for income tax, nearly doubled to Rs 1,208.15 crore as against Rs 643.66 crore in the year-ago period.

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History of Allahabad Bank

Allahabad Bank is one of the premier nationalized banks in India. It is also the oldest joint stock bank of India. It was incorporated by a group of Europeans at Allahabad on April 24, 1865. It was the time Indian economy had started shifting towards organized trade and business affairs. After some years in 1920, the P&O Bank brought Allahabad Bank and its headquarters at Kolkata. The Allahabad bank got an entirely new identity when it was nationalized in 1969 along with 13 other banks in India. Since then the Allahabad Bank had a smooth journey towards progress. Today it is one of the leading banks in India with a whooping business of over Rs.1, 00,000 crores. The first directors of the Bank were Mr. G. Brown, Mr. T. Moss, Mr. S. Bird and Mr. A. W. Wollaton. At that juncture, organised industry, trade and banking had just started taking shape in India. 

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