Andhra Bank clocked a net profit growth of 3.2 per cent for the quarter ended September 30 at Rs 326 crore, as against Rs 316.12 crore in the year-ago period.
Higher deposit costs, slower credit off-take and stressed assets kept the bank’s growth muted during the quarter. It is expected to maintain this level of growth in the current quarter.
The total income of the bank touched Rs 3,417.62 crore, up by 15.5 per cent from the year-ago period. However, its net interest income declined six per cent to Rs 894 crore during the quarter.
B.A. Prabhakar, Chairman and Managing Director, said the fall in net interest income was mainly due to reversal of interest on account of NPAs (non-performing assets) and restructured accounts.
Gross NPAs rose to Rs 3,013.79 crore (3.48 per cent) during the quarter from Rs 1,987.07 crore (2.67 per cent) in the year-ago period.
“Slippages were mostly on account of a few large and mid-corporate accounts to the tune of Rs 1,000 crore. Two pharmaceutical companies alone accounted for NPAs of Rs 579 crore — expansion of these companies was stuck as they could not raise the required equity,” Prabhakar told newspersons here on Tuesday.
He said the bank’s exposure to the troubled media company Deccan Chronicle Holdings was Rs 200 crore, but it would become due only after November. “We will be taking recovery steps after it falls due,” he said.
Cost of deposits rose from 7.45 per cent in the second quarter of last fiscal to 8.03 per cent last quarter. “I expect this trend to continue in the next two quarters,” he said.
Overall, the bank expects to end the year with a growth of about 15 per cent both in deposits and credit.