REFILE-Allahabad Bk sees non-interest income doubling in FY09

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KOLKATA, July 2 (Reuters) - State-run Allahabad Bank (ALBK.BO: Quote, Profile, Research) expects its non-interest income to double in FY09 as it plans to sell more third party financial products, a senior official said on Wednesday.

The bank recorded a non-interest income of 100 million rupees during 2007/08, executive director, J.P. Dua told reporters while announcing a distribution tie-up with Tata AIG Life Insurance Co Ltd.

The Kolkata-based bank also expects its deposits to grow by 17 percent and loans by 20 percent during the current fiscal, he said. "A lot of investment proposals are in the pipeline. This will drive loan growth," he said.

The bank also hopes to maintain net interest margin at 2.78 percent in the current fiscal, he said.

He also said the bank's capital adequacy ratio was at 12.04 percent and ruled out any immediate need to raise funds.

However, it has sent the proposal for a rights issue of shares to the federal government for the latter's nod after the bank's board approved the same, Dua said.

Shares in the bank were trading more than 5 percent higher at 56.40 rupees in a firm Mumbai market. (Reporting by Tamajit Pain; Editing by Prem Udayabhanu)