Andhra Bank Q3 Net Profit Fall By 82% to Rs 45.57 crore

Andhra Bank, one of the south based public sector lender posted a dismal set of numbers for its quarter ending December 2013. Net profit of the bank saw a sharp decline of 82% on yearly basis and was just Rs 45.57 crore for Q3FY14 compared to Rs 257.09 crore posted in Q3FY13. Even on sequential basis net profit fell by 36%.

Bank has disappointed with its performance in every operational matrices expect for other income. Net interest income (NII) of the bank has dropped by 11% on yearly basis and is at Rs 868.25 crore for Q3FY14. However, other income which forms little than 8% of total income increased by 27% on yearly basis and is Rs 302.9 crore for Q3FY14. The operating profit declined by 27% on yearly basis to Rs 521.57 crore. In addition to decline in NII, rise in operating expenses by 31% on yearly basis to Rs 649 crore for the quarter led to such fall in the operating profit of the bank. 

The asset quality of the bank has further deteriorated for the quarter. Gross non-performing assets (NPA) and net NPA of the bank has increased on both y-o-y as well as on q-o-q basis. It has increased by 10% and 5% on sequential basis to Rs 5692 crore and Rs 3653 crore. Even as percentage of advances, gross NPA and net NPA have increased by 41 basis points and 11 basis points respectively. 

The CMP of bank is currently trading at price to book value of 0.4 times. Although, it looks attractive but looking at deteriorating financial performance of the bank we advise our readers to stay away from the scrip as of now.