Andhra Bank, on Thursday, reported a 15.7 drop in net profit at Rs.257.09 crore during the third quarter of the current financial year against Rs.303 crore in the corresponding quarter of the previous fiscal.
The profit dip was attributed to higher provisioning for non-performing assets, which increased to 2.29 per cent during the quarter from 1.21 per cent in the year ago period. In absolute terms, the bank’s net NPAs stood at Rs.2,023.32 crore (Rs. 943.27 crore).
The bank accordingly made a provision of Rs.149 crore for NPAs during the quarter (Rs. 39 crore). Major contributors for the NPAs were Hyderabad-based media house and power utilities, Andhra Bank Chairman and Managing Director B. A. Prabhakar said. The two segments accounted for close to Rs.200 each to the NPAs.
“We have initiated the process for recovery of loan from the media house and it may take 4-6 months,” he said without naming the publication firm. Replying to queries, he said some assets of the media house were under mortgage and these collaterals were “good, clean and marketable”.
Mr. Prabhakar said the bank’s income during the quarter rose by 9.8 per cent to Rs.3,469 crore from Rs.3,158 crore. The bank’s total business crossed the Rs.2-lakh-crore-mark by December end, registering 14 per cent year-on-year growth.
He said the net profit of the bank declined by 6 per cent to Rs.944.55 crore from Rs.1,005 crore in the first nine months of the current financial year. The virtual slowdown in new investments with no new projects forthcoming was one of the main reasons behind the bank’s inability to maintain the guidance it had given for the fiscal, he added.