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Updated: December 20, 2013 00:20 IST

Rising non-performing assets a concern, says Andhra Bank CMD

Appaji Reddem
Comment (3)   ·   print   ·   T  T  
C.V.R. Rajendran
C.V.R. Rajendran

Non-performing assets (NPA) will continue to impact the performance of Andhra Bank in the third quarter, C. V. R. Rajendran, who took over as the Chairman and Managing Director of the bank recently, said here on Thursday.Speaking to The Hindu over phone, he said, “The NPAs will continue to impact the third quarter. There are some more slippages left on the NPA front in the current quarter. We do not know about the fourth quarter though.” Going by the broad indications of the Reserve Bank of India, the bank was not keen on lending to commercial real estate, he added.

“Owing to the global trends and the instructions of the RBI, the lending to activities in capital markets and commercial realty are always unwanted and least priority,” he said. The real estate sector is one of the major areas where the bank has taken a hit.

The Rs.200-crore plus account of Deccan Chronicle Holdings Ltd (DCHL) is one of the major accounts in the NPA arena.

The loan has 110 per cent mortgage back up, but the issue of multiple mortgages by DCHL is a concern for the bank. The bank is expected to auction the properties of DCHL shortly.

At present, the dipping profits and the growing NPAs are the key concerns before the new CMD.

The net profit of the bank in the second quarter by the end of September 30, 2013, was down by 78 per cent to Rs.71 crore from Rs.326 crore last year.

Net NPAs of the bank were up from 2.16 per cent last year to 3.54 per cent this year.

The total business of the bank was Rs.2.30 lakh crore.


Rajendran is new CMD of Andhra BankDecember 14, 2013

Banks resort to technical write-off wherein Banks will excluding
defaulting loans from of the list of repayment overdue. Despite being
not shown as receivables in books of account banks will have the right
to continue to pursue recovery through the legal track and other
mediums. This sort of Technical Write-off will facilitate banks for
getting escaped from the disgrace of being stamped as inefficient
banks for erroneous causes. RBI’s Dy.Governor K.C.Chakrabarthy had
revealed on the sacrifice of over Rupees one crore by writing off bad
loans to coporate sector which had surpassed the much criticized farm
loan waiver of 2008. Ironically medium and large enterprises segemt
has a share of 50 percent in NPAs (Non Performing Assets). It is
incredible that between 2007 to 2013, credit to 10 corporate houses
has more than doubled! This evidently proves the parallel between
higher NPA and higher credit growth!

from:  Madan Menon Thottasseri.Chennai
Posted on: Dec 21, 2013 at 21:35 IST

Shri. C.VR. Rajendran is an able administrator and having excellent
knowledge in the Banking sector will be able to bring Andhra Bank to new

from:  P.K.Ramchandran
Posted on: Dec 20, 2013 at 14:41 IST

Not only in this bank but in other PSBs too, NPAs pose a serious
problem. Recently, FM has stated that it is the board and the
management of the Banks which are responsible for this phenomenon. He
is right. But he too is answerable for political accountability. Be
that as it may, PSBs are now going to face another half a dozen or so
new banks which are in the process of being licensed. This is being
examined by an expert commitee and we needn’t worry. But the greater
worry is while so much is being done to create more new banks
commensurate care is not shown for the strengthening of PSBs. The
merger issue is dead as dodo. Recall the havoc done to the merged
state airlines when the government went ahead opening up the skies to
new airlines very liberally without taking commensurate care for
strengthening the state airlines. The danger in the case of banks will
be far more serious. These part of financial services industry which
is decidedly the growth engine. Urgent relook is needed.

from:  s subramanyan
Posted on: Dec 20, 2013 at 10:01 IST
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