Andhra Bank is set to get a new lease of life and there is no merger threat for the bank for now. The Government is certain to grant a capital infusion of ₹200- 300 crore.
Bankers’ meeting The issues of merger was discussed in the two-day bankers meet held in Pune last week and it is believed that no bank is in a position to support other banks in view of the prevailing economic conditions, CVR Rajendran, Chairman and Managing Director of Andhra Bank told BusinessLine here on Monday. Last week, BusinessLine reported that the bank, the only public sector bank from Andhra Pradesh, was facing the threat of merger in view of high non-performing assets from big corporate clients, especially from the infrastructure sector.
It has also been decided that the issue of merger/amalgamation will be board-driven and not to be pushed by the Government, said Rajendran, adding: “In addition to capital from the Government, we will be raising another ₹500 crore next month which should give us about ₹800 crore. With the previously-raised ₹500 crore tier – I capital, we will be comfortable.’’
Bad loans The bank, with 5.99 per cent non-performing assets (NPAs) in September 2014, will continue to focus on retail and small and medium enterprises. Once the loan-waiver is over in Andhra Pradesh, it hopes to have agriculture portfolio back in the prime.
Recovery efforts on track “Recovery efforts are also on the track and by March, we hope to bring down NPAs drastically,’’ he said. It had set a target earlier to bring NPAs down to 4 per cent by the end of current financial year. In the first two quarters, it had recovered over ₹2,200 crore NPAs. Andhra Bank Officers Union had also expressed its full cooperation in any recovery efforts.