Gold loan glitter for AP Grameena Vikas Bank in FY21

Gold loan segment during the fiscal nearly doubled to ₹1,876 crore from ₹953 crore in FY-20

Regional rural bank Andhra Pradesh Grameena Vikas Bank (APGVB) has reported a 63.53% increase in net profit at ₹1,009 crore for the financial year ended March 31 on the back of a robust growth in gold loan business.

Gold loan segment during the fiscal nearly doubled to ₹1,876 crore from ₹953 crore in FY-20, Chairman K. Praveen Kumar said in a release on the results approved by the bank’s board on Friday.

Sources said with almost 65% of its branches in rural areas, APGVB was well positioned to cater to the higher demand for gold loan witnessed amid the pandemic and its impact on household finances, especially on account of the cost of COVID-19 treatment. Drop in income or loss of livelihood made matters worse for many, forcing them to turn to gold loan.

Relatively lesser presence of organised gold loan companies in the hinterland as well as APGBV reducing the rate of interest on gold loan to 8.5% from 9.75% were also factors that drove more business to the bank, sources said.

“Despite being a challenging year due to COVID-19 and lockdown, we were able to sustain our growth trajectory. We made necessary changes in our lending… lowered home loan interest to 6.95% to stay competitive and increase market share,” Mr. Kumar said.

APGVB has become the first RRB to declare over ₹1,000 crore net in a fiscal. In the previous fiscal, it had reported a net profit of ₹617 crore, the release said.

On other performance parameters, the release said net interest margin improved to 4.85% (4.73%). Net NPA was nil, while the Gross NPA was 1.06%. 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 over 2,500 business correspondents (BC).

Deposits during the fiscal increased 18.07% to ₹21,838 crore (₹18,495 crore), while advances at ₹22,160 crore (₹19,323 crore) were higher by 14.68%.

With accelerated digital initiatives, focus on improving transactions at BC points and diversification in lending, the bank is poised to consolidate its position, Mr. Kumar said.

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