Andhra Bank's net profit increased 4.3 per cent to Rs 316 crore in the second quarter ended September 30, 2011 compared with Rs 303 crore in the year-ago period.
This was driven by 21.3 per cent increase in net interest income at Rs 951 crore.
The growth in non-performing assets and higher provisions, however, offset the growth in net interest income. This moderated the growth in net profit.
The net non-performing assets increased to 1.48 per cent (0.49 per cent). A portion of these came from agricultural advances.
“The bank has migrated to 100 per cent system-generated non-performing asset recognition for loans and advances. This has also resulted in higher provisions,'' Mr R. Ramachandran, Chairman and Managing Director of Andhra Bank, told news persons here on Wednesday.
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The net interest margin slipped to 3.82 per cent from 3.91 in the year-ago period due to interest reversals necessitated by system-generated non-performing asset identification and increase in cost of funds, among others.
Total business grew 21 per cent and stood at Rs 1,68,929 crore. The Capital to Risk-weighted Assets Ratio was at 13.07 per cent.
The banking subsidiary, being set up by Andhra Bank along with Bank of Baroda and Indian Overseas Bank in Malaysia, is likely to commence operations in December, Mr Ramachandran said.
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