Andhra Bank raises Rs.1,900 cr via bonds in April-June quarter

Sharath Chowdary

Andhra Bank has raised Rs.1,900 crore via bond issue during April-June quarter (Q1) of this financial year. The bank has raised Rs.900 crore through tier-I (AT-1) bonds that opened and closed for subscription on Friday, Andhra Bank Managing Director and CEO Suresh N Patel told The Dollar Business Bureau.

The bank had earlier raised Rs.1,000 crore through tier-II bonds during the last quarter and planned to raise a capital of Rs.2,700 crore this year. “We may require Rs.400 crore from the Government of India and another Rs.400 from Secondary Public Offering in the current year,” Patel said after announcing the financial results of the bank for Q1 of FY 2017 in Hyderabad on Saturday.

The bank has registered 85% decrease in net profit at Rs.31 crore in Q1 of FY 2017, when compared to Rs.202.52crore in the same quarter last year. The steep decline in the net profit is mainly due to an increase in non-performing assets (NPAs) and subsequent provisions, which have more than doubled during the review period, Patel detailed to the press.

The gross NPAs grew up 95% to Rs,14,137 crore in Q1 FY 2017 over Rs.7,238 crore in the same quarter previous year, while the net NPAs up surged 123% to Rs.8,147 crore against Rs.3,650 crore in the corresponding period a year-ago. To be prepared for the next quarter, the bank has enhanced its provisioning 88% to Rs.944 crore in the quarter under review from Rs.503 crore in the same quarter last year.

When asked about the bank’s slippages, Patel said, “In the last few quarters, the slippages were more than Rs.5,000 crore, and it was Rs.3,500 crore during Q1 of FY 2017. Most of these slippages are from energy, infrastructure, construction, iron and steel sectors. Some large accounts have slipped in the previous quarter, but going forward it will be prevented, as we have taken recovery measures. We have recovered around Rs.830 crore in the last quarter.” 

“However, the bank’s total income has increased 7% to Rs.4,855 crore in Q1 of FY 2017, from Rs.4,592 crore in the corresponding period last fiscal. This is due to 54% rise in non-interest income to Rs.484 crore in the review period against Rs.314 crore during same quarter a year ago,” he added.

Recently, the bank paid a dividend of Rs.20.86 crore to the Central Government for FY 2016. Suresh Patel handed over the dividend warrant to the Finance Minister Arun Jaitley on Thursday. He was accompanied by the bank’s Executive Directors A K Rath and S K Kalra.

(L-R) A K Rath, S K Kalra and Suresh N Patel giving the dividend warrant to Arun Jaitley in New Delhi on Thursday.