Views on Allahabad Bank 3QFY2014 results - Angel Broking

Mr. Vaibhav Agrawal (VP- Research – Banking, Angel Broking) on Allahabad Bank 3QFY2014 results:

"Allahabad Bank reported weak asset quality performance during the quarter, continuing the trend witnessed over last five quarters. Over the last five quarters until 3QFY2014, the bank's asset quality has faced tremendous pain, as absolute Gross NPAs have tripled, while net NPAs have quadrupled. Even during the quarter, absolute gross and Net NPAs continued the northward movement and grew by 14% and 12%, qoq respectively. On the operating performance front, while NII came in flat, in-line with expectations, non-interest income grew 59% yoy and aided the bank to report operating profit growth of 17%. We await management clarity on the nature of non-interest income growth during the quarter. Overall, the bank reported muted earnings growth of 5% yoy. Going ahead, we remain watchful on the bank's asset quality, as we take into account its exposure to stressed sectors and an overall weak macro environment. We retain our Neutral rating on the stock."

Source : Equity Bulls

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