Andhra Bank - Q1FY2014 Result Review - Angel Broking

Andhra Bank reported disappointing operating performance for the quarter. NII for the bank de-grew 6.9% yoy to Rs. 874cr. Non-interest income grew strongly by 98.4% yoy to Rs. 468cr, probably boosted by treasury gains. Overall, preprovisioning profit for the bank grew by 5.9% yoy to Rs. 746cr. On the asset quality front, the bank witnessed significant asset quality stress during the quarter, as Gross and Net NPA levels increased sequentially by around 27.8% and 33.3%. Bank increased Provisioning expenses by 86.3%, resulting in bottom-line degrowth of 36.3% yoy to Rs. 231cr.

Considering recent macro developments amidst a overall weak economic environment, we believe that asset quality stress is unlikely to abate as quickly as was anticipated earlier. Hence, we maintain our Neutral rating on the stock.

Source : Equity Bulls

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