Q2 slippages may be in Rs 2,000-2,500 cr range: Andhra Bank

Cash recovery and upgradation was at Rs 500 crore for the first quarter but bank is now focussing more on prevention of slippages and improved recoveries, he says.Below is the verbatim transcript of Suresh N Patel’s interview to Latha Venkatesh & Sonia Shenoy on CNBC-TV18.Latha: It is difficult to look at any good news from your numbers. The gross non-performing assets (NPAs) standing at 10.3 percent. Can you tell us the breakup how did your slippages do?A: If Rs 3,500 crore is what has slipped here during this quarter, retail is about Rs 300 crore, agriculture is Rs 426 crore and small enterprises and medium enterprise Rs 80 crore and large one is Rs 2,720 crore.Latha: What was your slippage last quarter?A: Last quarter was Rs 2,500 and December was also Rs 2,500. In April when I had told that next two quarters we will expect may be around Rs 2,500 to 3,000 crore slippage and probably for the first two quarters we are in the same range now because few larger accounts have slipped, going forward this slippage will come down now.Latha: From what you are saying this quarter also we will get another Rs 3,000-3,500 crore?A: No, what I am trying to say is last three quarters the slippages are more than Rs 8,000 crore because Rs 5,000 crore in previous quarter and this is Rs 3,000. So, Rs 8,500 crore. Now going forward slippages will come down but still next quarter we can say that anywhere we can be above Rs 2,000 or up to Rs 2,500. Thereafter, things will be settling down.Sonia: Can you tell us about the gross NPA figure itself? This time around it has crossed more than 10 percent should be expect that to continue for the next couple of quarters as well?A: Gross NPA percentage is basically in relation to the advances growth because the advance growth is not very high but overall credit growth because of corporate credit not growing. So, this percentage figure has gone up I fully agree on that from 8.39 to 10.3 but we are seeing at least an overall 13 percent growth during the whole year for advances.Latha: What about recoveries?A: Recovery has been Rs 500 crore -- cash recovery in up gradation during the quarter and we are stressing hard for more recoveries.Latha: Some of your peer banks have done very well on recovery. Punjab National Bank, Indian Bank all showed some excellent recoveries. Can you pull this up at all?A: We are also working for more recoveries. Our whole focus is on prevention of slippage and recovery. We are working on it.Sonia: You said that in the next quarter about Rs 2,500 of slippages will come through?A: This is an outer limit which I predict, it could be less also.Sonia: Can you give us a break up sector wise where are you seeing the most amount of pressure?A: It could be in construction, one or two accounts are in iron and steel. These are the few sectors which are causing more problems. Basically iron and steel and construction had given us most slippage this quarter -- only larger accounts are there.Latha: You did not get any capital when so many other banks got. Did the government give you a reason? Are you expecting more or are you being forced to become a niche bank?A: We had planned for Rs 2,700 crore capital for the current year. We have already raised Rs 1,900 crore. Rs 1,000 tier II bond and three days back we have raised Rs 900 crore additional tier-I (AT-1) bonds. Our capital adequacy if we work out with Rs 900 crore what we have raised now, it would be probably 12.58 -- right now it is 11.94. We have requested government for Rs 400 crore capital during the current year and Rs 400 from secondary public offering (SPO). So only Rs 800 crore balance to be raised, so we are hopeful may be next time when they give they will be considered.