The public sector lender, Andhra Bank has posted a marginal 3 per cent rise in the net profit to Rs 325.63 crore for the second quarter which ended on September, 30, 2012 against Rs 316.12 crore in the corresponding quarter of the previous year due to the higher interest expenditure and slippages.
The bank expects to maintain the current level of growth in the current quarter as well. The total income of the bank was Rs 3417.26 crore which is up by 15.5 per cent from the year ago period.
The Net Interest Income (NII) declined 6 per cent to Rs 894 crore in the second quarter. Mr. B A Prabhakar, Chairman and Managing Director of the bank said that the fall in the NII was due to the reversal of interest on account of non-performing assets (NPAs) and restructured loans.
Gross GPA rose 3.48 per cent to Rs 3013.79 crore for the second quarter as compared to Rs 1987.07 crore in the year ago period.
Mr. Prabhakar also said, "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".
Cost of deposits grew from 7.45 per cent of the Q2 of last fiscal to 8.03 per cent for the second quarter of the current fiscal.
The bank is aiming growth of about 15 per cent both in deposits and credits.