Andhra Bank profit up 10%
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Oct. 28: Andhra Bank on Thursday said that its net interest margin (NIM) rose significantly on the back of low cost of deposits and higher yield on advances for the second quarter of fiscal 2010. The NIM moved up to 3.91 per cent from 3.14 per cent in the same period in the last year.
The bank, however, failed to translate higher margins into net profit growth because of higher employee costs and higher provisioning. Net profit for Q2FY11 stood at Rs 303 crore, a 10.58 per cent jump over Rs 274 crore for Q2FY10.
In his maiden press meet after taking over as the chairman and managing director of Andhra Bank, Mr R. Ramachandhran said that the bank would like to maintain NIM at 3.5 per cent despite growing pressure due to increasing cost of deposits.
On MFIs, the chairman said the bank would access the risks involved in lending to microfinance sector similar to any other sector.
The bank’s executive director, Mr Anil Girotra, said the bank will continue to expand its branch network to tap low-cost funds. “We would launch over 100 branches in this fiscal and most of them would be located outside Andhra Pradesh,” Mr Girotra said.
On setting up a JV bank in Malaysia, Mr Girotra said that the JV firm has received all regulatory clearances. “The bank could be started in March or April 2011,” he said.
He said the bank has started a new customer redressal mechanism, where customer has just send a text message ‘upset’ through his mobile to get his complaints addressed.
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