Date:27/10/2007 URL: http://www.thehindubusinessline.com/2007/10/27/stories/2007102751660600.htm

Back Rise in expenses weigh on Andhra Bank net

Insurance foray under serious consideration

P.V. Sivakumar

Focus on fee-based income: (From left) Mr K. Ramakrishnan, CMD, Andhra Bank, and Mr Kalyan Mukherjee, Executive Director, at a press conference in Hyderabad on Friday. –

Our Bureau

Hyderabad, Oct. 26 Due to a significant rise in total expenses, Andhra Bank’s net profit grew marginally by 3.4 per cent at Rs 151 crore in the second quarter of the current fiscal ended September 30, 2007 against Rs 146 crore in the corresponding quarter of the previous fiscal.

The total income increased by 34 per cent at Rs 1,184 crore (Rs 882.5 crore) backed by Rs 28-crore growth in the non-interest income and a ‘not-so buoyant’ growth in interest income at Rs 1,046 crore (Rs 772 crore).

Total expenses rose by 40 per cent to Rs 951 crore (Rs 678 crore) due to increased revenue expenditure and establishment costs.

The ‘not-so buoyant’ growth in interest income was due to the general low in the credit market. The increase in other income is “in fact a viable strategy in view of the growing strain on interest margins,” Mr K. Ramakrishnan, Chairman and Managing Director, Andhra Bank, told newspersons here on Friday.The focus was on augmenting the fee-based income and the bank’s proposed foray into insurance was at a ‘high stage’ of consideration, he said.

The net interest income grew marginally from Rs 331 crore to Rs 345 crore during the quarter.

For the half year, net profit grew by 11.2 per cent at Rs 292.3 crore.