Analyst Meet / AGM - Analyst Meet
Target loan growth of 13% for FY2017
Andhra Bank conducted an analyst meet on 08 August 2016 to discuss the financial results for the quarter ended June 2016. Suresh Patel, Managing Director and CEO of the bank addressed the call:
Highlights:
. Business grew by 13.0% to Rs 315496 crore at end June 2016, driven by deposits rising 16.2 % to Rs 178268 crore, while advances grew by 9.0% to Rs 137228 crore.
. Retail Credit portfolio increased 27% driven by 22% surge in the housing loan book and 35% jump in vehicle loans. Educational loans also galloped 21% end June 2016 over June 2015.
. Priority sector advances of the bank improved 12%, while constitute about 43.57% of Adjusted Net Bank Credit at end June 2016, against the norm of 40%.
. Bank has targeted loan growth of 13% for FY2017, which is expected to be driven by the retail segment. The share of Corporate loan Book has declined from 54% to 47-48%. The bank would be selective on taking fresh corporate exposure.
. Gross NPA ratio of the Bank increased to 10.30% at end June 2016 from 5.75% end June 2015.
. The fresh slippages of advances was higher at Rs 3524 crore in the quarter ended June 2016, of which Rs 300 crore were contributed by the retail segment, Rs 426 crore by agriculture segment, Rs 80 crore by MSME and Rs 2720 crore by the large accounts.
. About 60 accounts with exposure of above Rs 1 crore contributed slippages of 3000 crore, of which 50 accounts contributing Rs 2700 crore of slippages had exposure of above Rs 50 crore each.
. The bank has conducted sale of 11 accounts with the exposure of Rs 98 crore to asset reconstruction companies (ARCs) in Q1FY2017.
. The restructured advance book of the bank stood at Rs 10659 crore at end June 2016. The slippages from restructured advance book to NPA category stood at Rs 1556 crore in Q1FY2017.
. Under Strategic Debt Restructurings (SDR) scheme, bank has exposure to six accounts with outstanding balance at Rs 1600 crore. Of these, 5 accounts are converted into equity, while one account with exposure of Rs 800 crore has slipped to NPA category.
. Under 5/25 refinancing scheme, the bank has exposure to 19 accounts with outstanding balance at Rs 2285 crore, of which most of the exposure is standard.
. Bank expects asset quality pressure to persist in Q2FY2016 with fresh slippages of Rs 2000-2500 crore for the quarter. Meanwhile, Bank expects to reduce GNPA ratio below 10% by end March 2017.
. Bank has recorded sharp decline in net interest margin on sequential basis to 2.87% in the quarter ended June 2016 from 3.41% in the quarter ended March 2016. The reduction in base rate, implementation of MCLR based lending rates and higher slippages of advances impacted the margins of the bank.
. The interest income reversals was above Rs 200 crore in the quarter ended June 2016.
. Bank has maintained the CASA Ratio at 26.4% end June 2016 as compared to 26.9% at end June 2015.
. The bank has 2821 number of branches and 3711 number of ATMs end June 2016.
. The bank has raised Rs 1000 Crore through Tier -II bonds in Q1FY2017. The bank has raised Rs 900 crore through Tier -I bonds in July 2016. With the capital raising in July 2016, the CRAR ratio of the bank is expected to increase to 12.58% from 11.94% at end June 2016. Bank has planned capital raising of Rs 2700 crore in FY2017, of which Rs 1900 crore is already raised. The balance capital needs are expected to be met through government infusion of Rs 400 crore and Rs 400 from secondary public offering (SPO).
. The SMA-2 category loan book of the bank stands at Rs 16308 crore at end June 2016 down from Rs 16852 crore at end March 2016.
Powered by Capital Market - Live News