Andhra Bank Q3 net down 15%

Total income grew 9.85% to Rs 3,469.21 cr from Rs 3,158.26 cr in corresponding previous quarter

Andhra Bank reported a decline of 15.2% in net profit to Rs 257.09 crore for the third quarter ended December 2012 as compared with Rs 303.17 crore in the corresponding quarter previous year. Sequentially, the net profit was down 21% as compared with Rs 325.63 crore in the September quarter.

The bank's total income for the quarter grew 9.85% to Rs 3,469.21 crore from Rs 3,158.26 crore in the corresponding previous quarter. Growth in advances as well as deposits stood at 14% compared with the year ago period.

The operating profit for the quarter declined 7.23% to Rs 712.09 crore from Rs 767.60 crore in the same quarter previous year while expenditure went up 15.32% to Rs 2,757.12 crore from Rs 2,390.66 crore in the year ago period.

Andhra Bank chairman and managing director BA Prabhakar said the fall in net profit was mainly because of higher provisioning, which also included about Rs 30 crore towards impending wage revision. Growth in advances was slower partly because of a self-imposed restraint in offering short-term loans  to large and mid corporate segments that has been a major contributor to the slippages during the current year. Demand for project financing was low, he said.

Total provisions contingencies saw a 7.9% decline to Rs 285 crore as compared with Rs 309.43 crore in the corresponding previous quarter though provisioning towards non performing assets (NPAs) rose 278% to Rs 149.20 crore from Rs 39.47 crore in the year ago period.

The bank has so far restructured Rs 3,318 crore loans while the CDR (corporate debt restructure) pipeline is gradually coming down signalling a turn around in the asset quality in the near future, according to Prabhakar. Despite the slippages, the bank could maintain a net interest margin (NIM) of  3.35%, he said.

Gross non performing assets (NPAs) of the bank stood at Rs 3,301.96 crore (3.36% of the total advances), an increase of 75% over Rs 1,884.13 crore in the corresponding previous quarter. Net NPAs saw a further surge in the third quarter and stood at  Rs 2,023,32 crore (2.29%) as compared with Rs 943.27 crore (1.21%) in the corresponding previous quarter.