Allahabad Bank chairman and managing director Dr B Samal attributes the improvement to jump in trading profits to Rs 190 crore (Rs 55 crore). Given the market situation, perhaps we could have earned more on this score, but we deliberately decided to take a cautious approach.

The interest earned on advances at Rs 1,117.87 crore (Rs 1,064.04 crore) showed a growth of a little more than 5 per cent as compared to 20.3 per cent in the year before that. But the interest earned on investments at Rs 1,054.28 crore (Rs 934.67 crore) showed a jump of 12.8 per cent (3.7 per cent). The fee-based income, however, remained stagnant at around Rs 143 crore for the past two and half years, says Samal.

While the average yields on advances and investments dropped to 10.63 per cent (11.31 per cent) and 10.59 per cent (11.08 per cent), respectively, the average cost of funds also dropped to 7.24 per cent (7.51 per cent).

The bank has proposed to bring down the average cost of deposits to 7 per cent or less in the current year from 7.20 per cent in the year under review. The capital adequacy ratio improved to 10.62 per cent (10.5 per cent) and the ratio of net non-performing assets to advances dropped to 10.57 per cent (11.23 per cent).