Powered by a robust business from the retail and small and medium enterprise (SME) segment, the Andhra Bank posted a jump in its net profit by 74% at Rs 251.26 crore for the quarter ended September 2015, results of which were announced at the bank’s headquarters in Hyderabad on Saturday. The bank could cut down its losses on risky corporate customers by carefully reducing its exposure to the segment.
Suresh N. Patel, who assumed charge as the bank’s managing director and CEO earlier this week, released the results to the media, while executive director S.K. Kalra, who held the in-charge CEO post till now, explained the factors that led to the impressive net profit in the half yearly results.
Andhra Bank is one of the PSU banks that received a stimulus package from the Centre, with a share of Rs 378 crore.
The Andhra Bank’s total revenue for this quarter grew by 7.24%, to Rs 4,744 crore against Rs 4,423 in the corresponding period last year. The absence of huge growth was explained as an attempt to be choosy about the bank’s client base. The bank restricted its exposure to the corporate customers to around 10%, as against 24% of retail and SME segments in this quarter. However, Patel explained that the exposure to retail and SME segments may go up in the following years because the bank is planning to grow in all segments. The Andhra Bank is the lead bank in the newly formed Andhra Pradesh, but it has a major presence in Telangana too. A variety of factors including rise in saving accounts and deposits, improvement in employee performance and reduction in non-performing assets and focused exposure to high performing sectors like retail and SME are the reasons for the sound growth in the total business, Patel said. For example, there is a growth of 27% in savings deposits.
Patel said the bank expects to chalk a 15% growth in advances as well as deposits in the coming months without disturbing its present net interest margin (NIM) at 3%. Currently the bank had an NIM of around 3.20% which is much better than the previous 2.93%. In fact, NIM determines the strength of a bank taking its overall business into consideration.
- Advertisement -