Andhra Bank’s net profit decreased 78 per cent to Rs 71 crore in the second quarter ended September 30, compared with Rs 326 crore in the corresponding quarter of previous year on higher provisioning.
The total income of the Hyderabad-based bank, however, increased 13.2 per cent to Rs 3,817 crore from Rs 3,416 crore the same period last year. The total business grew 17.9 per cent at Rs 2.30 lakh crore.
The provisions (other than tax) and contingencies increased to Rs 502 crore (Rs 139 crore) while the net non-performing assets (NPAs) had gone up to 3.54 per cent (2.16 per cent).
The earnings per share stood at Rs 1.26 (Rs 5.82), Andhra Bank said in a release issued on Wednesday.
When contacted, S.K. Karla, Executive Director, Andhra Bank, told Business Line that the higher provisioning was due to more slippages. “There are some mid/big corporates which defaulted leading to increase in NPAs. This was due to general economic scenario. There was also dip in treasury income,’’ he said. The corporates that defaulted were engaged in textiles, sugar, solar power and telecom sectors, he added.
RECIOVERY HIT
The bank had a robust recovery of Rs 248 crore during the quarter. “We would have recovered another Rs 250 crore if there was no agitation in the Seemandhra region. For 70-75 days, branches could not function and recoveries were hit,’’ he added.
On the operational front, bank had actually done well, he claimed, citing the 16 per cent hike in the net interest income and increase in net interest margin to 3.16 per cent (3.13 per cent). For the full year, the NIM could be around 3 per cent, he added. Andhra Bank’s scrip lost 4.90 pc on the Bombay Stock Exchange on Thursday to end at Rs 59.25.