Allahabad Bank Q2 net rises 8 pc to Rs 70 cr

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Net interest income grew by 27.3 percent year-on-year to Rs 18,585.9 crore in Q2 despite tepid loan growth.

Shares of State Bank of India rallied almost 8 per cent on Friday as the country's largest lender has posted a multi-fold jump in consolidated net profit at 1,840.43 crore for the second quarter ended September 30, 2017 boosted by the sale of its stake in SBI Life Insurance.

To set aside enough buffers against the expected bad loans, SBI's provisions increased 87 percent over the previous three months to Rs 18,418 crore in the quarter ended September.

At 14:06 hours IST, the stock price was quoting at Rs 333.10, up Rs 19.35, or 6.17 percent amid high volumes on the BSE.

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Gross NPAs in absolute terms were also lower by 1 percent at Rs 1,86,115 crore (from Rs 1,88,068 crore in Q1FY18) and net NPAs fell 9 percent at Rs 97,896 crore (Rs 1,07,760 crore). Total income on standalone basis increased to Rs 65,429.63 crore in July-September 2017 against Rs 50,742.9 crore in the same period a year ago. The provisions for bad loans stood at Rs 16,715 crore in Q2 FY18, up from Rs 7,670 crore in the same quarter of FY17, which led to the fall in net profit.

It's loan assets degrew marginally at Rs 1.52 lakh crore while Ananthasubramanian said signs are visible for better credit demand in the next two quarters.

The bank said that in order to boost its capital adequacy, the lender may raise around Rs 1,000 crore through QIP issue within the current fiscal. As a percentage of total advances, net NPAs declined 54 basis points sequentially to 5.43 per cent. The growth will be be around consumption (retail), bank executives said. The banking giant has been improving its profitability and capitalisation over the last few quarters but had to contend with potential worsening of asset quality. "SME and personal loans are showing good recovery, and agriculture will start showing once we get the loan waiver amount from the government", Kumar said.

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