Andhra Bank takes large NPA hit from iron & steel and infra sectors

With Rs 41.73 billion in NPAs, infrastructure sector came close second with write-offs at Rs 3.63 billion

Iron and steel and infrastructure sectors contributed to almost 50 per cent of Andhra Bank's gross non-performing assets (NPAs) as the bank continues to witness more slippages during the current financial year.

A fresh Rs 58.35 billion was added to the gross NPAs during the first three quarters of the year while the bank was able to reduce the existing NPAs worth of Rs 19.05 billion during the same period. As a result, the total gross NPAs rose to Rs 215.99 billion from Rs 176.7 billion at the beginning of the financial year, taking the ratio to an all-time high of 14.26 per cent.

Most of the bank's exposure to iron and steel industry resulted into NPAs. As much as Rs 51.18 billion outstanding loans went badly out of the total exposure of Rs 78 billion.

With Rs 41.73 billion in NPAs, infrastructure sector came close second even though this sector has had the largest size of write-offs at Rs 3.63 billion followed by textiles-cotton sector with Rs 1.53 billion write-offs.

Attributing the recent quarterly losses to the growing NPAs and the corresponding provisioning requirements, a senior bank official said the increase in the number of insolvency cases at National Company Law Tribunal (NCLT) had only added to the current challenges.

The bank had made Rs 45.4 billion in fresh provisions during the year while taking the total provisions to Rs 107.41 billion.