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Andhra Bank net profit down in FY 06

Written by: Staff

Mumbai, May 2: South-based public sector banking major Andhra Bank has witnessed a fall in its net profit at Rs 485.50-crore in FY 06 as against Rs 510.10-crore in FY 05 despite its business and gross credit growing by a robust 24.08 per cent and 25.54 per cent at Rs 56,406-crore and Rs 22,484-crore, respectively.

The bank's net profit from core banking operations excluding profit on sale of investments catapulted a whopping 208 per cent at Rs 414.66-crore as against Rs 134.59-crore in FY 05, while its core operating profit rose 14.96 per cent to Rs 698.27-crore. Operating profit for FY 06, however, slipped to Rs 769.11-crore from Rs 992.93-crore last fiscal.

Addressing journalists here today, the bank's chairman and managing director Mr K Ramakrishnan said that the fall in operating profit was due to no treasury profits in FY 06 as against a profit of Rs 385-crore in FY 05.

Attributing the fall in profit to falling interest rates in the last few years, intense competition in the marketplace and no treasury operations in FY 06, Mr Ramakrishnan averred that the bank's performance across several crucial parameters was all the more creditable against this backdrop.

While the bank's capital adequacy ratio stood at a healthy 14 per cent, its total deposits rose 23.13 per cent to Rs 33,922-crore with low-cost deposits registering a growth of 23.68 per cent at Rs 12,318-crore. Net interest income increased by Rs 100-crore to Rs 1,169-crore from Rs 1,069-crore in FY 05, a rise of 9.35 per cent.

Admitting that the cost of funds and yields on both investments and advances were down marginally as compared to FY 05, Mr Ramakrishnan attributed this to concessions given to borrowers on rates due to market compulsions. ''This year, however, we will ensure that our yields remain stable and concessions to borrowers will be few and far between,'' he said.

The bank has fared well on the NPA front with its gross NPA down to 1.94 per cent while its net NPAs too declined to 0.24 per cent from 0.28 per cent in FY 05.

While the bank recorded a growth of 27 per cent in credit extended to the SME segment at Rs 2,439-crore, its retail lending rose to Rs 5,050-crore from Rs 3,715-crore in FY 05. Priority sector advances stood at Rs 8,924-crore, up 26.22 per cent from Rs 7,070-crore in FY 05.


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