Essar Steel, Bhushan Power Recoveries To Aid Allahabad Bank’s Earnings This Fiscal
“The worst is behind us,” the lender’s executive director said.
Allahabad Bank will see a boost in its earnings this fiscal because of the resolution of Essar Steel and a potential recovery from Bhushan Power & Steel, the lender’s Executive Director K Ramachandran said.
“Essar resolution helped us because we had about Rs 291 crore which was potentially written off. The entire thing came to us as net profit,” Ramachandran said in an interview with BloombergQuint. If Bhushan Power is resolved, Rs 1,775 crore will be shaved off from the bank’s gross non-performing asset numbers, he said.
The National Company Law Appellate Tribunal is set to hear Bhushan Power’s resolution case on Jan. 13.
Worst Is Over
“The worst is behind us,” Ramachandran said.
The lender “had a lot of clean-up” to do in the second quarter and early third quarter on small loans, adding that it has “aggressively” taken measures on that count. “That’s why you can see our provision coverage ratio has touched about 80 percent.”
“We’re now into aggressive recovery mechanism either through relending or through OTS (one-time settlement),” he said.
Watch the full conversation here: