Andhra Bank Q3 profit dips 8.5% on higher provisioning

Andhra Bank reported a 8.5 per cent dip in net profit at Rs 303 crore in the third quarter ended December 31, 2011, compared with Rs 331 cr in the year-ago period.

“The decrease in net profit was due to increase in provisions because of restructuring of some accounts,” Mr B. A. Prabhakar, Chairman and Managing Director, Andhra Bank told newspersons here on Thursday.

A bulk of restructuring was done in the telecom sector. Including the Rs 1,150 crore of restructured loans during the quarter under review, total restructured portfolio stood at Rs 3,500 crore as on December 31, 2011.

Some more corporate accounts are likely to be restructured in the current quarter. “But it will not be of this magnitude,” Mr Prabhakar said.

The key financial indictors of the bank are as follows: net non-performing assets have gone up to 1.21 per cent from 0.47 per cent last year; the total income is up by 36 per cent at Rs 3,158 crore; the net interest income grew by 17 per cent to Rs 984 crore; the earnings per share stood at Rs 5.42 (Rs 6.82); and the total business increased by 20.4 per cent to Rs 1,77,850 crore.

OUTLOOK

For the full year, the net interest margin might come under pressure, Mr Prabhakar said. “It may come down by 10-15 basis points.”

The net interest margin for the third quartet stood at 3.81 per cent against 3.84 per cent in the quarter ended September 2011.

The growth in credit and deposits could be 15-16 per cent and 18 per cent, respectively, he said.

Andhra Bank will be hiring 1,450 clerks and 820 officers for the next financial year.

nagsridhu@thehindu.co.in