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BANKING
Andhra Bank net down 6 percent
Tue, 07 Aug 2012 00:26:10 +0530
Business Standard Economy Policy News

Andhra Bank registered a decline of 6 per cent in net profit for the first quarter ending June 30, 2012, to Rs 361.83 crore from Rs 385.71 crore in the corresponding quarter last year. Total income, however, grew 17.7 per cent to Rs 3,357.22 crore as compared with Rs 2,852.28 crore.

The bank attributed the drop in net profit to higher cost of deposits and lower growth in advances on the back of mounting non-performing assets (NPAs).

Core income (excluding treasury business) during the quarter grew only 7.6 per cent to Rs 1,150 crore while the growth in advances stood at 14.4 per cent as compared with 18.5 per cent growth in deposits. The bank was unable to either reduce the cost of deposits or transfer a part of it to the borrowers while the base rate was reduced by 25 basis points during the same period.
“The quarter has been quite challenging due to economic slowdown and we had consciously reduced our exposure to corporate and short-term loans in this quarter,” BA Prabhakar, chairman and managing director of Andhra Bank, said here on Monday. Retail saw the lowest credit expansion with just 4.7 per cent and a steep rise in NPAs — net NPAs stood at 1.52 per cent of total advances as compared with .45 per cent last year -- was due to slippages on account of three-four large loan accounts.

Total expenditure as well as provisioning for NPAs during the quarter went up 23.34 per cent and 34.3 per cent to Rs 2,653.84 crore and Rs 157.25 crore respectively. These stood at Rs 2,151.52 crore and Rs 117.09 crore last year. The bank did restructuring of loans worth Rs 770 crore in the three-month period. Sequentially, the growth in advances improved by over 2 per cent over the March quarter.
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