 "Andhra Bank to focus on profitability")
"I can sacrifice on top-line but I will not compromise on the bottom line any more," S K Kalra, managing director and chief executive officer (CEO) of Andhra Bank said after inaugurating their 2,600th branch on Friday.
So, focus has now turned to improving the profitability rather than chasing the revenue growth and if the macro economic situation improves, as was expected from the third quarter, the bank can even try achieving the dream target of Rs 1,000 crore in net profit for the current financial year, according to Kalra.
However, the bank needs to post a profit growth similar to last year of around 47 per cent to achieve this target. "It is possible to increase the profits without having to grow the revenues at a similar rate. Improving the recoveries while reducing the NPAs and costs are some of the means being pursued to achieve the goal,"he said.
The bank has also embarked on a faster branch expansion with a view to increase its pan-India presence with a plan to add 400 branches in the current year itself. Responding to a question he said they are planning to open overseas branches.
Total business of the bank stood at Rs 2.85 lakh crore in March 2015 and it expects to reach the Rs 3 lakh crore mark by March next year. Compared to a net profit of Rs 630 crore in 2014-15 it now set a 26 per cent growth in net profit to Rs 800 crore in the current year.
Kalra said they have also set a target for reduction in gross NPAs to below 5 per cent from the present 5.75 per cent level and net NPAs to 2.5 per cent from the present level of 2.93 per cent by the end of the current year. He said the multiplier effect of the economic growth on banks business has gone down quite a lot.
In the past a GDP growth rate of 7 per cent used to translate into 17-18 per cent growth in overall business of banks while the same is not more than 9-10 per cent now, according to him.