From correspondents in West Bengal, India, 06:32 PM IST

Allahabad Bank's net profit dipped 83 percent in the second quarter this fiscal to Rs.416.8 million as against Rs.2.39 billion in the same period last year.

According to a company statement: 'Decrease in profit is mainly attributable to increased depreciation on investment by Rs.448.9 crore (Rs.4.49 billion) due to general market scenario and interest and other charges reversal on agriculture debt relief and debt waiver by Rs.71.23 crore (Rs.712 million).'

However, the net interest margin (NIM) during the July-September quarter was 2.7 percent as against 2.6 percent during corresponding previous quarter.

Cost of deposit of the bank also went up marginally to 6.73 percent from 6.67 percent.

The bank may report a drop in its profit in the October-December quarter, compared with the previous year period during which the bank earned a 'windfall' treasury income, chairman-cum-managing director of the bank K.R. Kamath said.

'We had earned a treasury income of Rs.3.5 billion in the third quarter of 2007-08, a feat not possible to replicate in the current quarter. So there would be a fall in our profits in the third quarter of 2008-09,' he said.

Kamath is hopeful that the performance of the bank will improve in the January-March quarter this fiscal as he expects 'light liquidity' condition to improve by then.

(Staff Writer, © IANS)