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Our Bureau

Steep fall in non-performing assets; yield on advances rise to 9.7 pc

DR K. RAMAKRISHNAN, CMD

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Hyderabad Jan. 29 Andhra Bank has posted a net profit of Rs 136.28 crore for the third quarter ended December 2006, up marginally from Rs 128.86 crore achieved during the comparative quarter of last year. Its total business stood at Rs 61,000 crore at the end of the quarter.

The total income registered was Rs 945.62 crore (Rs 817.5 crore) and total expenses (excluding provisions and contingencies) stood at Rs 684.89 crore (Rs 614.53 crore). The operating profit for the quarter under review was Rs 260.73 crore (Rs 202.97 crore).

Announcing the working results for the quarter, Dr K. Ramakrishnan, Chairman and Managing Director, and Mr Kalyan Mukherjee, Executive Director, told newspersons that the non-performing assets (NPAs) at 0.44 per cent of net advances, was the lowest among the lowest in the banking sector. This, despite the fact that they had grown from 0.28 per cent in the corresponding quarter of last year.

For the nine months, Andhra Bank achieved a net profit of Rs 399.12 crore (Rs 346.91 crore), an increase of 15 per cent. The operating profit was Rs 690.32 crore (Rs 563.59 crore), up by 22.49 per cent. The interest income increased to Rs 2,345.4 crore (Rs 2,265.18 crore).

Growth trajectory

Explaining the highlights on a year-on-year basis for the 9-month period, Dr Ramakrishnan said: "The bank was on a good growth trajectory as far as the net profitability was concerned, despite the cost of deposits going up".

Answering questions on NPAs, Mr Mukherjee said while the gross NPAs stood at Rs 440 crore (1.72 per cent), the net NPAs were at Rs 111 crore (0.44 per cent) against advances. The yield on advances has also gone up to 9.77 per cent from 9.43 per cent.

Credit disbursal

Credit extended to housing sector constituted Rs 3,261 crore (Rs 2,281 crore), a growth of 42.96 per cent, while retail lending grew by 29.38 per cent to Rs 5,756 crore (Rs 4,449 crore). Credit to SME sector was also high at Rs 2,835 crore (Rs 2,402 crore), an increase of 18.03 per cent.

Mr Ramakrishnan said home loans, especially to individuals would remain a high priority, while the bank would go slow on commercial real estate and group institution financing. Infrastructure financing would be an important sector. The bank had recently tied up with Infrastructure Finance Company Ltd for the purpose.

Andhra Bank's fee-based income, through products in mutual funds, insurance etc. would get a push. As part of financial inclusion, it adopted two districts — Srikakulam in Andhra Pradesh and Ganjam in Orissa.

A smart card to be used to pay wages and pension of State Government employees in Warangal district on a project scale is also on the anvil, he said. The bank also plans to launch Biometric ATMs to reach out to illiterate and inculcate banking habit in semi-urban and rural areas soon.

More Stories on : Financial Performance | Public Sector Banks | Outlook

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