The Hindu Business Line : Andhra Bank profit falls 20% on higher provisioning

HIGHER provisioning led Andhra Bank Ltd to record a 20 per cent dip in net profit at Rs 109.33 crore for the second quarter ended September 30, as against Rs 136.98 crore in the same period last year.Provisions and contingencies during Q2 zoomed to Rs 194.89 crore (Rs 71.91 crore). During the quarter, the bank shifted a portion of its G-Secs to the `held to maturity' category, as per RBI guidelines, by charging a depreciation to the tune of Rs 153.25 crore, arising out of shifting of securities, said Mr T.S. Narayanasami, CMD, Andhra Bank, addressing a press conference here today.

Treasury income of the bank was at Rs 168.90 crore (Rs 143 crore).

Total income grew to Rs 828.79 crore (Rs 770.39 crore).

Total expenditure was at Rs 488.57 (Rs 499.50). The bank's net profit during the half year ended September 30, was at Rs 259.49 crore (Rs 255.66 crore).

Hints at hiking rates

The bank is looking at hiking the interest rate on short-term deposits and lending rates by about 25 basis points (0.25 pc) , shortly.

Mr Narayanasami said it was an indication of hardening interest rates in the system.

Mr R. Balakrishnan, Executive Director, said, the net interest margins of the bank has improved to 4.39 per cent from 3.88 per cent providing a cushion to raise rates at a later date.

Mr Narayanasami also expressed the bank's interest in going in for an acquisition in the near future.

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