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Andhra Bank has reported a 78 per cent fall in net profit at Rs 70.65 crore for the quarter ended September, thanks to a steep increase in provisioning apart from other factors like higher expenditure, poor show by the retail and the treasury segments. The bank’s net profit was Rs 325.63 crore in the corresponding quarter last year.
The bank’s total income, however, grew by 11.74 per cent to Rs 3,174.73 crore in the quarter, as compared to Rs 2,778.44 crore in the corresponding previous quarter on the back of a 43 per cent increase in corporate and wholesale lending.
The total expenditure for the quarter grew by 14.26 per cent at Rs 3,174.73 crore due to the rise in interest and operating expenses.
The provisioning and contingencies made by the bank during the quarter under review have been higher by 260 per cent at Rs 502.19 crore than Rs 139.48 crore in the year-ago period. Of this, Rs 200.41 crore was provided for towards the non-performing assets.
The same was Rs 121.31 crore in the year-ago period.
Treasury income remained flat at Rs 770 crore as compared to Rs 766.77 crore in the year-ago period, though the profit from the treasury operations decreased to Rs 127.31 crore from Rs 145.24 crore in the year-ago quarter. Retail banking also shrunk both in revenues and profits during the quarter ended 2013.
"Net profit was down due to a combination of factors, including the additional provisioning of Rs 232 crore, higher depreciation, less income from treasury operations. But, the fundamentals remain strong reflecting in an increase in operating profit by Rs 107 crore, higher net interest margin at 3.16 per cent among other parameters," said S K Kalra, executive director of Andhra Bank.
He also said the loan recovery was hit by agitations and the bank could recovery only Rs 280 crore against the target of Rs 500 crore. The bank hopes to improve its performance by containing further slippages in the coming quarters, he added.
The bank said its total business during the quarter registered a growth of Rs 17.9 per cent at Rs 2,30,057 crore as compared to Rs 1,95,129 crore in the corresponding quarter last year.
The bank’s total income, however, grew by 11.74 per cent to Rs 3,174.73 crore in the quarter, as compared to Rs 2,778.44 crore in the corresponding previous quarter on the back of a 43 per cent increase in corporate and wholesale lending.
The total expenditure for the quarter grew by 14.26 per cent at Rs 3,174.73 crore due to the rise in interest and operating expenses.
The provisioning and contingencies made by the bank during the quarter under review have been higher by 260 per cent at Rs 502.19 crore than Rs 139.48 crore in the year-ago period. Of this, Rs 200.41 crore was provided for towards the non-performing assets.
The same was Rs 121.31 crore in the year-ago period.
Treasury income remained flat at Rs 770 crore as compared to Rs 766.77 crore in the year-ago period, though the profit from the treasury operations decreased to Rs 127.31 crore from Rs 145.24 crore in the year-ago quarter. Retail banking also shrunk both in revenues and profits during the quarter ended 2013.
"Net profit was down due to a combination of factors, including the additional provisioning of Rs 232 crore, higher depreciation, less income from treasury operations. But, the fundamentals remain strong reflecting in an increase in operating profit by Rs 107 crore, higher net interest margin at 3.16 per cent among other parameters," said S K Kalra, executive director of Andhra Bank.
He also said the loan recovery was hit by agitations and the bank could recovery only Rs 280 crore against the target of Rs 500 crore. The bank hopes to improve its performance by containing further slippages in the coming quarters, he added.
The bank said its total business during the quarter registered a growth of Rs 17.9 per cent at Rs 2,30,057 crore as compared to Rs 1,95,129 crore in the corresponding quarter last year.
