Andhra Bank aims for Rs 1.5 lakh cr business by Q2 '10

Andhra Bank has drawn up a growth plan to leap into the league of big banks by setting a target of Rs 150,000 crore business by September 2010, said bank’s chairman and managing director RS Reddy.

“We have targeted a prospective business of Rs 100,000 crore by March 2009, which will see the graduation of the bank into the mid-size category. We have already reached Rs 95,000 crore. As on December 2008, our advances and deposits grew 30-31 per cent and 20-22 per cent year-on-year. We expect this to reach 32 per cent (credit) and 25 per cent (deposits) respectively through which we should be able to add Rs 55,000 crore business by the second quarter of 2009-10,” he said.

Speaking to mediapersons on the sidelines of a press conference to announce the bank’s foray into sale of gold coins, Internet banking and SMS alerts, Reddy said the bank would maintain a net interest margin of 2.61 per cent in the current financial year. “We, however, expect this to improve in the range of 3-3.25 per cent next year,” he added.

Reddy said the bank’s proposed life insurance foray in joint venture with Bank of Baroda (BoB) and UK-based risk, wealth and investment company Legal and General insurance was well on course.

Andhra Bank had entered into a partnership with BoB and Legal and General, which has $550 billion funds under management, in March 2008 to float a life insurance venture – Baroda Legal and General Life Insurance. While Andhra Bank holds 30 per cent stake in the JV, BoB and the London-based firm has 44 per cent and 26 per cent respectively.

“The three companies recently held a principal meeting in London. BoB has already applied with the Reserve Bank of India for approval of the JV. We plan to follow suit in a couple of days and expect a nod from the regulator by this month end,” he said.