The Hindu Business Line : Heavy provisions, loss on investments sale

Money & Banking - Financial Performance
Corporate Results - Public Sector Banks

Heavy provisions, loss on investments sale — Andhra Bank Q1 net falls to Rs 85 crore

Our Bureau

Hyderabad , July 27

DESPITE an increase of 21.69 per cent in total business, Andhra Bank has suffered a significant fall in net profit for the first quarter of the current fiscal ended June 30, 2005, at Rs 85.16 crore from Rs 150.16 crore in the corresponding quarter of previous fiscal.

The fall in net profit was primarily on account of heavy provisions towards depreciation on investments and amortisation and also loss on sale of investments, against major profits on sale of investments achieved in the corresponding quarter of the previous fiscal.

The bank posted a total business of Rs 43,758 crore by the quarter ended June 2005 compared with Rs 35,958 crore in the same period last fiscal. The deposits increased by 13.62 per cent at Rs 25,656.7 crore (Rs 22,580.18 crore), while gross bank credit improved by 35.31 per cent at Rs 18,101.96 crore (Rs 13,378 crore).

The bank provided Rs 43.44 crore (Rs 6.83 crore) towards depreciation and amortisation. Further, as against a profit of Rs 131.8 crore on sale of investments during first quarter of last fiscal, the bank suffered a loss of Rs 2.14 crore in the quarter under review.

In a press release here on Wednesday, the bank said excluding the profit/loss on sale of investments, the bank's net profit from core-banking operations during the quarter under review showed a robust growth of 375 per cent at Rs 87.3 crore as against Rs 18.36 crore in the corresponding quarter of the previous fiscal.

Following increased provisions towards depreciation on investments and amortisation, the operating profit during the quarter under review declined to Rs 160.1 crore (Rs 264.48 crore).

During the quarter under review, the bank posted an increase of 10.12 per cent in interest income at Rs 617.23 crore (Rs 560.5 crore). The non-interest income excluding profit/loss on sale of investments has shown a rise of 25.97 per cent at Rs 79.34 crore (Rs 62.98 crore).

The bank's gross non-performing assets during the quarter declined to 2.54 per cent (Rs 460.51 crore) from 4.74 per cent (Rs 634.13 crore) in the corresponding quarter of the previous fiscal. The net NPAs have further come down to 0.38 per cent (Rs 68.08 crore) from 0.85 per cent (Rs 108.81 crore).

The credit card business improved to Rs 192 crore from Rs 135 crore in the corresponding quarter of the previous fiscal. On Wednesday, the Andhra Bank stock closed lower at Rs 108.10 against the previous day's close of Rs 113.45 on the BSE.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page