Andhra Bank puts up Rs 1,653-cr of NPAs for sale

Government-owned Andhra Bank has put up 62 stressed loan accounts, with a combined principal balance of Rs 1,653 crore, for sale in a move to partly reduce the burden of non-performing assets (NPAs).

 

This will be the second NPA sale by the bank in this financial year. In June, it sold Rs 3,871 crore of NPAs. The bank had added Rs 2,214 crore in new NPAs during the 12 months ended June; reduction in NPAs stood at Rs 456 crore during the same period. The present round of auction, which would take the total sale of NPAs to a little over Rs 5,500 crore, comes ahead of the announcement of financial results for the September quarter. The loan accounts of L&T Chennai Tada Tollways (Rs 108 crore), Chennai Elevated Tollway (Rs 60.96 crore) and Bartronics India (Rs 78.56 crore) are some of the large NPAs in the current asset sale.

 

As on June, gross and net NPAs had risen to 13.33 per cent and 9.09 per cent, respectively, from 10.3 per cent and 6.21 per cent in June 2016. The gross and net NPA ratios were 5.75 per cent and 2.99 per cent, respectively, in June 2015.

 

Close to 70 per cent of the bank’s Rs 194,280 crore NPAs arise from its operations in Delhi, Telangana and Maharashtra. Iron and steel, infrastructure, textiles and construction contribute to the bulk.

 

The bank’s total business was Rs 334,073 crore, of which advances were Rs 188,272 crore as on June. During the June quarter, credit growth was 6.25 per cent at Rs 145,801 crore, on the back of higher growth in lending to individuals and small and medium enterprises. The management has been gearing up to expand the business by raising tier-2 capital, in addition to Rs  1,100 crore of infusion by the government earlier this year.