Andhra Bank net up 21% at Rs 141 cr

BANKING SCORECARD

Andhra Bank has reported a 21.2 per cent increase in net profit to Rs 141.09 crore for the quarter ended June 2007 compared with Rs 116.41 crore in the corresponding quarter last financial year. The rise is on the back of higher growth in income during the three-month period.

However, the net profit margin for the quarter declined to 3.42 per cent from 3.80 per cent in the corresponding previous quarter, while sequentially it showed a marginal improvement (3.2 per cent).

Operating profit grew 18.20 per cent to Rs 223.36 crore for the quarter under review compared with Rs 188.97 crore in the corresponding previous quarter.

Total income for the quarter registered a 30.49 per cent increase to Rs 1,101.91 crore compared with Rs 844.44 crore in the corresponding previous quarter. 
 

Performance during quarter ended June 2007
Rs crore	Oriental  Bank		Andhra Bank		Vijaya Bank		Syndicate Bank
	2007	% chg	2007	% chg	2007	% chg	2007	% chg
Interest earned	1,534	35.1	989.4	30.2	898.2	46.4	1,846.30	50
Other income	146	13.3	112.5	10.4	68.5	20.9	153.1	14.1
Expenditure	1,355	42.2	878.6	34.1	795.5	57.5	1,684.80	58.5
Operating profit	325	7.4	223.4	8.2	171.3	12.2	314.5	4.2
Net profit	139.2	48	141.1	21.2	111.4	53.3	221	22.4
EPS (Rs)	5.56	10.3	2.91	21.3	2.57	52.9	4.23	22.2
CAR (%)		13.85% from 12.1%		12.49% from 14.38%		11.21% from 11.55%		4.23% from 3.46%

K Ramakrishnan, chairman and managing director, Andhra Bank, said the margins were under strain on account of higher cost of funds.

"Overall, the bank is on the path of projected growth in business as well as in profit for the current year," he said, adding the bank was shedding the high-cost bulk deposits to improve profit margins.

Currently, the bank has Rs 10,000 crore bulk deposits, constituting 25 per cent of the total deposits. The average cost of these deposits is 9.6 per cent, he said.

While the cost of deposits was up to Rs 6.06 per cent during the quarter ended June 2007 from 4.49 per cent in the corresponding period last year. the top line benefited from the rise in interest rates on the advances. Total business was up 24.82 per cent, reflecting the average growth trend.

Ramakrishnan indicated that the bank may raise Rs 500-700 crore tier II capital during the third or fourth quarter of the current financial year. He said the bank had projected between 20 per cent and 22 per cent growth in net profit and 22-25 per cent in income for the year.