Andhra Bank Gives Out Disappointing Q3FY13 Numbers

DSIJ Intelligence / 24 Jan 2013

Andhra Bank today came out with its Dec 2012 quarter numbers, which disappointed the streets on all parameters. Net Interest Income (NII) of the bank decreased by 1.27% to Rs 971 crore while net profit took the most beating down of 15% to Rs 257 crore.

Andhra Bank today came out with its Dec 2012 quarter numbers, which disappointed the streets on all parameters. Net Interest Income (NII) of the bank decreased by 1.27% to Rs 971 crore while net profit took the most beating down of 15% to Rs 257 crore. The result came in during the market hours and market participants clearly showed their thumbs down, hammering down the share price by 7% to Rs 110.25 per share. Following are the banks key financial parameters: 

Particulars (%)

Dec-12

Dec-11

Net Interest Income (NII)

971.38

983.85

Net Profit (Rs/Cr)

257.09

303.17

CAR (Basel II)

11.86

12.58

Provisions (Rs/Cr)

285

309.43

Gross NPAs

3.66

2.38

Net NPAs

2.29

1.21

Return On Assets

0.79

1.07
The bank continued to face serious headwinds when it came to the asset quality. Gross and net NPA of the bank increased by 18 and 13 basis points to 3.66% and 2.29% respectively. Asset quality of the Andhra bank is among the worst in the industry. The bank also maintains a very low Provision Coverage Ratio (PCR), which stands at 52.44% against the Reserve Bank of India (RBI) guidelines of 70%.

As on Dec 31, 2012, Capital Adequacy Ratio (CAR) of the bank (as per Basel II) stood at 11.86% against 12.58% in the similar quarter last year. Return On Asset (on an annualized basis) also declined by 28 basis points to 0.79% as on Dec 2012. 

On the segmental front, retail banking posted the worst performance, revenue de-grew by 48% to Rs 627 crore while profit from the same stood at Rs 130 crore against Rs 291 crore in the similar quarter last year. Profit from treasury declined marginally by 1% to Rs 129 core while it increased in case of wholesale banking business by 9% to Rs 366 crore on a YoY basis. 

At the time of uploading the article, only limited information was available on the result. The bank is currently available at a Price to book value of around 0.7x. Overall, the bank posted very bad set of Dec 12 quarter numbers and despite its availability at cheap valuation, we would advise our readers to stay away from the counter, as there could be more down side left in the scrip. 

Particulars

Revenue

Operating Profit

Segment (Rs/Cr)

Dec-12

Dec-11

% Change

Dec-12

Dec-11

% Change

Treasury Operations

627.93

525.26

19.55

129.17

127.64

-1.20

Retail Banking

627.32

1200

-47.72

130.64

290.74

-55.07

Wholesale Banking

1789.6

1375.96

30.06

365.96

334.81

9.30

Other Banking Operations

424.36

56.87

646.19

86.32

14.41

499.03

Un-allocable Expense

 

 

285

309.43

-7.90

Total

3469.21

3158.09

9.85

427.09

458.17

-6.78

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