See loan growth of around 18-19% this year: Allahabad Bank

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See loan growth of around 18-19% this year: Allahabad Bank

JP Dua, chairman and managing director, Allahabad Bank in an interview to CNBC-TV18 said, rise in NIM has been possible because of the bank's ability to contain cost.

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Excerpts from Closing Bell on CNBC-TV18 Watch the full show » ALSO READ See latest News about Allahabad Bank See previous management interviews See what other Experts & Brokerages are saying about Allahabad Bank

Allahabad Bank reported a rise of 34.6% in its Q3FY12 net profit, which stood at Rs 560 crore against Rs 416 crore a year ago. Its net interest income jumped 31.3% to Rs 1,381 crore from Rs 1,051.6 crore year-on-year.

Its net interest margin (NIM) increased to 3.73% from 3.44% a year ago. JP Dua, chairman and managing director, Allahabad Bank in an interview to CNBC-TV18 said, rise in NIM has been possible because of the bank's ability to contain cost .

Meanwhile, Dua expects loan growth be around 18-19% this year. "This is a busy season and I hope in the next few months loan growth picks up," he said.

Below is the edited transcript of Dua's interview with CNBC-TV18. Also watch the accompanying video.

Q: Could you tell us what your net interest margins are for this quarter?

A: Our NIM has gone up to 3.73% from 3.44% a year ago. This has been possible because we have been able to contain our cost. Yields are better because we have been able to pass on some of the cost to the borrowers.

Q: Is this 3.73% margins sustainable? It compares to 3.68% that you did last quarter are you expecting to grow higher from this level or do you think it will be stable at this 3.7 level?

Q: For the 9 months the NIM comes to 3.60% and we hope to maintain above 3.50 plus.

Q: You do have a big exposure to the power segment and this has been a point of concern for a lot of banks including yourself - can you tell us what is the quantum of restructured assets that Allahabad Bank has seen this quarter around?

A: The total restructured assets with the bank is Rs 3,823 crore. They are all healthy assets- out of this Rs 3,823 crore only Rs 259 crore is NPA.

Q: This NPA there has been a slight increase on a quarter on quarter basis - how do you see it going forward from here?

A: Major cause for our NPA is small loans and agriculture. Even in this quarter whatever NPA is there, around 60% NPA has come from agriculture and MSME. So, priority sector contributes major towards our NPA. At the same time, in the last 9 months we have recovered Rs 720 crore. Going forward we have a target of Rs 1,050 crore of recovery. I am very sure we will achieve this target. This will not only reduce our NPA, but fresh addition will be lesser than existing.