Andhra Bank gains on reporting a 342% increase in net profit

Andhra Bank gains on the back of improved profitability from operations and interest reversals on account of recoveries

Shares of Andhra Bank are trading higher by 2.5% to Rs 93 on the BSE after it reported a 342 per cent increase in net profit at Rs 202 crore for the December 2014 quarter, on the back of improved profitability from operations and interest reversals on account of recoveries.

However, the gross non performing assets( NPAs) remained high and even rose further to 5.99 per cent, compared to 5.55 per cent in the year-ago period.

Meanwhile, the total income grew 16 per cent to Rs 4,541 crore in the quarter under review from Rs 3,900 crore in the year-ago period and the net interest margin (NIM) rose to 3.43 per cent from 2.89 per cent. Total business expanded 11.3 per cent, while the advances grew 15.7 per cent.

The bank plans to raise another Rs 500 crore in tie-1 capital by March this year; it would also consider raising Rs 1,000-1,500 crore in the first half of the next financial year if the interest rates look attractive, said C V R Rajendran, chairman and managing director of Andhra Bank. He expects a 20 per cent growth in business next year.

The stock opened at Rs 92, touched a high of Rs 94 on the BSE. A total of 255,627 shares have changed hands on the BSE so far.