Gold glitter loan for AP Grameena Vikas Bank in FY21
Gold lending segment in fiscal year nearly doubled to ₹ 1,876 crore from ₹ 953 crore in fiscal year 20
Regional rural bank Andhra Pradesh Grameena Vikas Bank (APGVB) announced a 63.53% increase in net profit of ₹ 1,009 crore for the year ended March 31, thanks to strong growth in lending business gold.
The gold lending segment in the year nearly doubled to ₹ 1,876 crore from ₹ 953 crore in FY20, Chairman K. Praveen Kumar said on Friday in an approved earnings statement. by the board of directors of the bank.
Sources said that with nearly 65% of its branches in rural areas, APGVB is well positioned to meet the increased demand for gold loans seen amid the pandemic and its impact on household finances, especially because of the cost of COVID-19 treatment. Declining income or loss of livelihood made matters worse for many, forcing them to turn to gold lending.
The relatively less presence of organized gold lending companies in the hinterland as well as the APGBV reducing the interest rate on gold lending to 8.5% from 9.75% were also factors that drove more business to the bank, sources said.
“Despite being a difficult year due to COVID-19 and the lockdown, we were able to maintain our growth trajectory. We have made the necessary changes to our loans … We have reduced the mortgage interest rate to 6.95% to remain competitive and increase our market share, ”said Mr. Kumar.
APGVB became the first RRB to report more than 1,000 crore net in a fiscal year. In the previous fiscal year, it had reported net profit of ₹ 617 crore, the statement said.
On other performance parameters, the press release indicates that the net interest margin improved to 4.85% (4.73%). The net NPA was zero, while the gross NPA was 1.06%. The capital adequacy ratio was 19.27% (16.15%).
The bank operates in 21 districts of Telangana through 502 branches and three districts of Andhra Pradesh with 273 branches. It also has more than 2,500 commercial correspondents (BCs).
Deposits during the year increased 18.07% to ₹ 21,838 crore (₹ 18,495 crore), while advances to ₹ 22,160 crore (₹ 19,323 crore) were higher by 14.68% .
With accelerated digital initiatives, the focus on improving BC point transactions and lending diversification, the bank is poised to consolidate its position, Kumar said.