Andhra Bank net profit dips 33% to Rs 35 cr in March quarter

Decline mainly due to 12.6% rise in operating costs and 24.7% hike in provisions and contingencies

Andhra Bank has reported 32.7 per cent decline in net profit at Rs 35.13 crore in the quarter ended March 2017 as compared to Rs 51.6 crore in the corresponding quarter previous financial year.

The decline in net profit is mainly due to 12.6 per cent rise in operating expenses and 24.7 per cent increase in provisions and contingencies. However, the bank's total income surged 6 per cent at Rs 5,424.7 crore during the quarter under review when compared to Rs 5,124.4 crore in the corresponding period last year.

During the quarter, the bank's total business grew by 9.3 per cent to Rs 339,673 crore from Rs 310,673 crore in the corresponding previous quarter. Advances grew by 5.8 per cent while the total deposits grew by 12.1 per cent. Net interest margin (NIM) has marginally rose to 3.59 per cent from 3.41 per cent in the year-ago period due to a decline in the cost of deposits and funds.

In March 2016, the bank's net non-performing assets (NPAs) stood at 7.57 per cent as compared to 4.6 per cent in the same period last year. The gross NPAs rose to 12.25 per cent from 8.39 per cent.

For the full year ended March 2017, the total income grew by 5.9 per cent at Rs 20,336 crore while net profit decreased 67.8 per cent to Rs 174 crore as compared to the previous year.

In compliance with the directives of Reserve Bank of India (RBI) on asset quality review (AQR) of advance, the bank has kept incremental provision against standard advances of Rs 376.57 crore in the last financial year and Rs 75 crore during January-March quarter, Andhra Bank said in a statement.

The bank has received Rs 1,100 crore from the Government of India during the quarter as share application money for allotment of shares on preferential basis.

The bank's provision coverage ratio stood at 51 per cent in the financial year 2016-17 as compared to 57 per cent in the previous financial year.