Views on Andhra Bank 3QFY2014 results - Angel Broking

Views of Mr. Vaibhav Agrawal (VP- Research - Banking, Angel Broking) on Andhra Bank 3QFY2014 results:

"Andhra Bank witnessed continued asset quality pressures, while reporting weak operating performance. Gross and Net NPA levels for the bank increased sequentially by 14% and 5%, respectively, on an already large base. Provisioning expenses for the bank during the quarter increased by more than 50% yoy to Rs. 428cr. On the operating front, NII for the bank de-grew by 11% yoy. Non-interest income grew strongly by 27% yoy, thereby limiting the decline in operating income to 3%. Opex for the bank rose steeply by 31% yoy (though was in-line with our estimates), thereby resulting in 27% yoy decline in pre-provisioning operating profit to Rs. 522cr. Overall the bank reported PAT de-growth of 82% yoy. We await management comments particularly regarding the asset quality performance during the quarter and outlook on the same going ahead, given its relatively high exposures particularly to sectors like power, iron & steel and textile and an overall weak macro environment. We maintain our Neutral rating on the stock."

Source : Equity Bulls

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