Allahabad Bank to sell land

State-run Allahabad Bank has decided to sell vacant land in its possession, which are idling, to boost capital, and would kick start the process soon by putting about 3 lakh square feet in Bareilly and Jhansi for sale for about Rs 60 crore. The Kolkata-based lender, that traces its history back to the British era, has vast parcels of land attached to several of its old branches, chief executive Usha Ananthasubramanian told ET. Allahabad Bank, founded in 1865, is the second oldest bank after State Bank of India. “This exercise is part of a non-core assets sale,” she said. The government is telling all weaker banks to offload their non-core assets to boost capital adequacy. The bank has started identifying all idle and vacant land parcels. “We have a lot of real estate, and have started to earmark the ones which are not useful to us. We will be selling these vacant land pieces,” Ananthasubramanian said, adding that she has already given the green signal to sell excess land attached to two its major branches in Bareilly and Jhansi. As part of exiting non-core business under the turnaround strategy, the bank is also set to merge its merchant banking subsidiary AllBank Finance. The exercise would fetch it Rs 75 crore and boost its capital adequacy ratio, which stood at 11.74% at the end of September, better than 10.49 % a year ago as per Basel III norms. The bank’s return of assets for half-year to September improved to 0.08 % from -0.44% a year back, compared with State Bank of India’s 0.22%, and the most valued HDFC Bank’s 0.93% (not annualized). A dozen banks, including Allahabad Bank and Union Bank of India, that were facing stress in asset quality and low return on assets have submitted turnaround plans to the government. Capital infusion in these banks will be subject to achievement of a few agreed upon targets in the areas such as NPA recovery, credit expansion, while there will be restriction in branch opening.