Andhra Bank Q1 Result, Net falls 84% to Rs 31 crore

Andhra Bank on Saturday reported a steep 84.64 percent drop in net profit at Rs 31.09 crore for the quarter ended June, 2016 under the impact of a rise in fresh slippages. The bank's net profit was Rs 202 crore in the corresponding quarter previous year.

The total income for the quarter grew 7.2 per cent at Rs 4,855.50 crore as compared to Rs 4,529.23 crore in the year ago period.

The ratio of net non-performing assets (NPAs) more than doubled to 6.21 per cent during the quarter as compared to 2.99 per cent in the corresponding previous quarter. The gross NPAs rose to 10.30 per cent from 5.75 per cent in the year ago period.

"Fresh slippages peaked to Rs 3,500 crore in this quarter from a level of Rs 2,500 crore in each of the last two quarters. While the stress is continued stay in the system we believe that there will be a decline in slippages going forward," Andhra Bank managing director and chief executive Suresh N Patel said.

 

Despite the NPA issues the bank was able to increase the operating profit by 21 per cent, he added.

The net profit took a big hit as the bank had to make a provisioning of Rs 969 crore, which has almost neutralised the increase in operating profit rose to Rs 1,000 crore as compared to Rs 826 crore in the year ago period. A provisioning of Rs 623 crore was made in the quarter ended June, 2015, according to the bank.

Sequentially there was a decline in total income as well as the operating profit as compared to Rs 5,124.37 crore and Rs 1,173.38 core respectively in the quarter ended March, 2016.

Patel said almost 80 per cent of the fresh slippages were reported from 15-17 accounts that mostly belong to energy and infrastructure. The bank has increased its revenue and margins by expanding the the retail credit portfolio, which grew 26.5 per cent during the quarter, according to him. For the whole of this year the bank expects to see a business growth of 13-14 per cent.

Responding to a question bank Patel said that so far we have not received any reference to consider for the Reserve Bank of India (RBI)'s scheme for Sustainable Structuring of Stressed Assets which was introduced recently.