)
Hit by a steep increase in non-performing assets (NPAs), public sector lender Andhra Bank Limited reported a 36.1 per cent decline in net profit to Rs 231.28 crore for the first quarter ended June 2013, as compared with Rs 361.83 crore in the corresponding quarter last year.
“The bank’s gross NPAs for the quarter rose to 4.73 per cent as on June 30, 2013, as against 2.72 per cent during the same period a year ago. Also, the net NPAs almost doubled to 3.27 per cent, as against 1.52 per cent, as the loans given to the mid-corporate sector were facing stress due to the current micro-economic conditions,” Andhra Bank’s chairman and managing director BA Prabhakar told mediapersons here on Wednesday.
The bank had restructured roughly about Rs 649 crore of loans during the quarter, and its restructured book at the end of the quarter stood at Rs 9,846 crore (standard restructured accounts), which approximately worked out to 9.8 per cent of its total credit book, he said. Of the total NPAs of about Rs 4,748 crore in Q1, about 50 per cent was under the sub-standard category.
The bank’s restructuring pipeline for the second quarter will be around Rs 3,000 crore (including discounts), Prabhakar said.
Total business at the end of the first quarter stood at Rs 2,26,265 crore, a growth of over Rs 31,958 crore (or 16.4 per cent), while deposits increased 16.8 per cent to Rs 1,25,826 crore from Rs 1,07,695 crore.
Its advances recorded a growth of 16 per cent, reaching the level of Rs 1,00,439 crore in Q1, from Rs 86,612 crore in the corresponding quarter last year, while CASA (current account-savings account) deposits increased to Rs 30,000 crore from Rs 28,754 crore, up 4.3 per cent. CASA share in total deposits was at 24 per cent.
Replying to a query on the reasons for the bank’s net interest margin (NIM) to be considerably low at 2.7 per cent during the first quarter, Prabhakar said had there been no reversed interest of Rs 96 crore, they should have seen a positive NIM growth.
“We expected that the deposit rates will come down. But looking at the recent developments in the markets and also the measures that the RBI had initiated, we do not see much scope to bring down the cost of the deposits from the current level, at least for another three to four months. The margins will be under pressure and I think we should be able to maintain that at around 2.5 per cent,” he said.
On the credit growth estimates for the full year, he said it would be confined to the non-corporate business, and that they should be capable of achieving 13-14 per cent credit growth this year.
