Allahabad Bank shares drop 5% as Q4 profit slumps 68%

Shares in Allahabad Bank fell as much as 5 per cent after the public sector lender reported a 68.5 per cent plunge in quarterly net profit for the January to March 2013 period.

Allahabad Bank's net profit for the fourth quarter stood at Rs 126 crore, down from Rs 400 crore in the same quarter last fiscal. The sharp decline in profits was on account of rising provisions for bad loans.

Allahabad Bank reported a 37 per cent year-on-year rise in provisions for bad loans, which rose to Rs 622.5 crore from Rs 454.4 crore a year ago.

Net interest income, the difference between interests earned on advances and paid on deposits, slipped 18 per cent year-on-year to Rs 1,056 crore against Rs 1,288 posted in the fourth quarter of 2012.

Allahabad Bank's net interest margin, a key measure of profitability, declined to 2.3 per cent against 3.02 per cent in the last quarter.

As of 2.00 p.m. Allahabad Bank shares traded 3.7 per cent lower at Rs 127.90 on the BSE against a 1.3 per cent gain on the BSE Sensex.