Loans to sugar major Bajaj Hindusthan is the biggest account that has been restructured by Allahabad Bank during the third quarter, a time when PSU banks have faltered on poor asset quality. The pain is yet to go off as accounts like Concast Steel, MSP Steel and Tantia Construction are on the pipeline of restructuring, CMD Rakesh Sethi told analysts during a conference call.
Loans to sugar major Bajaj Hindusthan is the biggest account that has been restructured by Allahabad Bank during the third quarter, a time when PSU banks have faltered on poor asset quality. The pain is yet to go off as accounts like Concast Steel, MSP Steel and Tantia Construction are on the pipeline of restructuring, CMD Rakesh Sethi told analysts during a conference call.
Sugar, infrastructure and steel are the sectors giving most pain to the Kolkata-based bank that is celebrating 150 year of existence. "Of Rs 2,643 crore of total restructuring done, the largest is Bajaj Hindustan. The account is Rs 767 crore to be exact. We have taken a Rs 87 crore haircut," CMD Rakesh Sethi said.
The total restructuring was done partly through Joint Lender's forum of about Rs 2,000 crore and balance through the corporate debt restructuring scheme, Sethi said. Last month Bajaj Hindusthan said it is seeking seeking shareholders nod for debt restructuring package for its debt over Rs 6,500 crore.
Other accounts are Unity Infrastructure (Rs 200 crore) Gujarat Electricity Board (Rs 200 crore) and 3i Infotech (Rs 76 crore). "Accounts like 3i Infotech always pay up but this time they didn't," Sethi said.
Concast Steel, MSP Steel and Tantia Construction are next in line for restructuring.
"We have a robust pipeline for restructuring of iron and steel sector in the fourth quarter also aggregating Rs 1,500 crore." To be fair, despite suffering a net profit fall of about 50% to Rs 164.11 crore in the third quarter of 2014-15, Allahabad Bank's asset quality improved with gross bad loans as a share of gross advances remaining stable at 5.46% on year.
Slippages from restructured accounts were Rs 400 crore, which includes accounts like TransLloyd (Rs 309 crore), Krishna Knitwear (Rs 66 crore) and Minerva Hotels (Rs 43 crore). "Let's not take comfort that our slippages have been lowest in the past eight quarters. Till I see this to get sustained I wont say the worst is over," Sethi said.
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