July 29: Hyderabad-based state-owned lender Andhra Bank has reported a 25 per cent growth in net profit for the quarter ended June 30, 2010, on the back of robust growth in net interest income, lesser growth in operating costs and higher yield on advances.
The bank posted a net profit of Rs 320.41 crore in the quarter under review as against Rs 256.22 crore in the same period a year ago, the chairman, Mr R.S. Reddy, told mediapersons here on Thursday. Net interest income went up to Rs 736.25 crore from Rs 441.37 crore, registering an increase of 66.81 per cent .
“Reduced cost of deposits and higher yield on advances helped the bank to achieve a decent growth in net interest margin, which inched up to 3.72 per cent in the first quarter of fiscal 2011 from 2.85 per cent in the same period year ago,” Andhra Bank executive director, Mr Anil Girotra, told this correspondent.
Apart from regular strea-ms of revenue, the growth in core non-interest income and fee-based income have contributed to the growth in the bank’s net profit.
The chairman ruled out any plans to raise funds at present and asserted that the bank has enough headroom to raise funds, whenever it feels necessary. “The credit growth might pick up in Q2 and Q3. Then if I feel that we need to raise funds, then we will take a call,” Mr Reddy said.
Even as the bank touched Rs 1.3 lakh crore business in the first quarter, Mr Girotra said they have set a target of achieving Rs 1.67 lakh crore business by March 2011.
According to Mr Girotra, the bank’s first overseas foray into a joint venture with Bank of Baroda and Indian Overseas Bank in Malaysia has got regulatory approvals and the JV bank will be called India International Bank (Malaysia) BHD. “Currently, we are in the process of forming a company and by the end of this year, you could expect some activity there,” he said.