Allahabad Bank chairman and managing director O.N. Singh (right) and executive director S.K. Goel in Calcutta on Tuesday. Picture by Kishor Roy Chowdhury

Calcutta, Jan. 24: Allahabad Bank has declared a 40.85 per cent jump in net profit to Rs 224.30 crore for the third quarter of the current fiscal from Rs 159.25 crore in the corresponding quarter last fiscal. The bank’s total income increased 22 per cent to Rs 1095.58 crore from Rs 897.79 crore in the year-ago period.

The improved third quarter results helped the bank post a 20.14 per cent rise in earnings for the nine months ended December 31 at Rs 555.63 crore (Rs 462.47 crore), circumventing a steep rise in its staff cost. After a wage revision, the bank’s staff and establishment cost during the April-December period went up to Rs 468 crore from Rs 286 crore in the year-ago period.

Allahabad Bank has also increased its non-interest, fee-based income during the October-December quarter by 41.69 per cent to Rs 65.03 crore.

The city-based bank has substantially reduced its net non-performing assets to 0.83 per cent on December 31 from 1.28 per cent on March 31. “This was primarily because we made a loan recovery of Rs 225 crore during the nine months and wrote off 25,000 NPA accounts, which are below Rs 25,000, in the last two months,” Allahabad Bank chairman and managing director .N. Singh said. Allahabad Bank still has 1,65,000 sub-Rs 25,000 NPA accounts on its books.

The bank has also arrested the fall in yield on advances and reported an 8.86 per cent yield on loans for the October-December period compared with 8.70 per cent in the previous corresponding period. “This was primarily because we took a stand to increase our retail and farm lending, which are generally high-yielding advances,” Singh said.

“We will select the foreign partner of our non-life insurance venture on February 15,” he said, adding the bank has shortlisted five to six foreign insurers, including Axa and Liberty Mutual Life. The foreign partner will hold a 26 per cent stake in the proposed insurance venture, which will have the Dabur group (5 per cent), Indian Overseas Bank (15 per cent), Bank of Rajasthan (10 per cent) and Karnataka Bank (10 per cent) as co-promoters.