Andhra Bank has blamed the less-than-impressive profitability and growing non-performing assets (NPA) to the fluid situation in the State.

With 1,200 of its 2,000 branches located in Andhra Pradesh, contributing 50 per cent of its total business, the bank has had to bear the brunt of the uncertainty gripping the State, more than any other financial institution.

The bank’s Chairman and Managing Director C.V.R. Rajendran attributed the high cost of deposit and the challenges in recovery to the ‘ups and downs’ witnessed in the State, apart from the general recession. He expressed concern over the huge advances made to the infrastructure sector and the inability of the projects in yielding results. “The gross NPA crossed 5 per cent, while the net NPA touched 3 per cent, which is a cause for concern,” he said.

Rajendran also hinted at reduction of the corporate portfolio and focusing in turn on the retail portfolio, especially on CASA (current account and savings account) deposits.

The bank is betting on geographical diversification to curtail the damage. “Apart from the 200 branches we are opening in the current year, we will have 500 more next year, most of which will be in the neighbouring States of Tamil Nadu, Karnataka, Maharashtra, Orissa and Chhattisgarh, as a natural brand extension”, he said.

He hoped that the new Government formed after the 2014 general elections would focus more on infrastructure sector.

‘ an opportunity’

To a query on the Andhra Pradesh bifurcation issue, Rajendran dubbed it as an opportunity as well as threat, depending on one’s perspective.

“We see an opportunity in it, as construction of a new capital and setting up of new facilities offers a lot of growth potential,” he opined.

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