Andhra Bank net rises 25%

State-owned Andhra Bank posted a 25.04 per cent rise in net profit to Rs 320.4 crore for quarter ended June 30, compared with Rs 256.22 crore in the corresponding period last year, on the back of a sharp increase in net interest income (NII).

Chairman and Managing Director R S Reddy attributed the surge in NII to growth in credit offtake, particularly in retail and micro, small and medium enterprises (MSME), which registered growth of 36.69 per cent and 46.6 per cent, respectively. NII was up 66.81 per cent to Rs 736.25 crore from Rs 441.37 crore in the corresponding period of last year.

Improved deposit mobilisation and a significant reduction in cost of deposits by 128 basis points from 6.77 per cent last year added to the margins. The net interest margin improved to 3.72 per cent from 2.85 per cent last year. The yield on advances dropped by only 31 basis points – to 10.89 per cent from 11.2 per cent a year ago.

Retail lending during the quarter was Rs 8,822 crore and MSME lending stood at Rs 8,764 crore, compared to Rs 6,454 crore and Rs 5,978 crore last year, respectively.