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nclusive Growth For Financial Independence - B A

Prabhakar, CMD, Andhra Bank
| 8/8/2013 9:00 PM Thursday
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The growth story of India is fascinating as the economy

unfolds its vast presence of human and natural resources to the world. India is the second most
populous country of the globe with a population of 1.21 billion and has become the destination
for quality workforce and a potential market place for domestic and multinational companies.
Today, India is one of the fastest growing economies amidst global uncertainties. Nonetheless, it
is pertinent to note that the growth is not uniform and inclusive, which is causing aberrations to
the desired economic development process.

The vast unorganised sector comprising farmers, landless labourers, micro, small and medium
enterprises etc., have limited access to affordable banking services, which is believed to be
acting as one of the major constraints to the growth of the country.

The major reasons, on the demand side, for the exclusion of this vast majority of the population
from formal banking are low literacy coupled with scant financial literacy, low income, absence
of collateral/assets and social exclusion. The supply side factors are distance, costs, timings,
complicated procedures, sub-optimal attitude of staff and offering of inappropriate products, etc.
Andhra Bank: Contributing To All-Round Growth
Andhra Bank, an offshoot of the nationalist movement, was established in 1923 by the great
freedom fighter and visionary Dr Bhogaraju Pattabhi Sitaramayya. The founder believed that
political freedom would mean nothing if not combined with financial independence. The bank
has transformed from a small local bank to a leading public sector bank of the country.

Over the years, the bank has progressed rapidly and has spread its wings with 1867 branches pan
India. A majority of these branches are located in rural and semi-urban areas and have been
extending support to the rural community for their integrated development by adopting
various credit programmes. The performance highlights of the bank with regards to the Priority
Sector for the year 2012-13 are as under:

As % to Net Bank Credit Andhra Bank has initiated

Amount several steps to extend banking
No. Category RBI Stipulation Achievement
(Rs Crore) facilities to the financially
(%) (%)
1 Priority Sector 35132 40 41.29 excluded with a special focus on
2 Agriculture 16451 18 19.33 the weaker sections. The bank
has been associating actively in
3 Weaker Sections 9997 10 11.75
the implementation of various
4 Women 9972 5 9.78 programmes for all-round rural
development. These include:

a) Lead Bank: Andhra Bank was assigned with lead bank responsibilities in the four districts of
Andhra Pradesh viz. Srikakulam, East Godavari, West Godavari and Guntur. Subsequently two
more districts viz., Ganjam and Gajapathi in Odisha were added, taking the total number to six.

b) Farmers Service Co-operative Societies (FSCS): The bank was a part of FSCS as a special
agency with a view to blend the business acumen and experience of commercial banks with co-
operative societies in providing varied services to rural people at a single point. The societies are
functioning under the elected body and the Managing Director of the society is on deputation
from our bank. At present, there are seven FSCSs catering to the financial needs of 117 villages
covering more than 34000 members. FSCS accept deposits from the members and extend loans
to the members. The FSCS assumes the total responsibility for agricultural/rural development of
all its members, particularly small and marginal farmers and artisans at a single point. The
societies also undertake non-credit business activities such as trading of produce, fertilisers,
pesticides, seeds etc.

c) Regional Rural Banks (RRB): In order to provide banking services to rural people, Andhra
Bank established RRBs in Andhra Pradesh and Odisha. Subsequent to mergers, Andhra Bank
now has only one RRB i.e. Chaitanya Godavari Grameena Bank (CGGB), operating with 128
branches spread in the East Godavari, West Godavari and Guntur districts of Andhra Pradesh
state.

d) Self Help Group Linkage (SHG): Andhra Bank is at the forefront in implementation of SHG
Bank Linkage programmes and is always ahead of other banks since the inception of the scheme
(1992). The bank has covered 2.27 lakh groups across the country with an outstanding credit of
Rs 3395 crore as on 31.03.2013.

e) Andhra Bank Rural Development Trust (ABRDT): ABRDT was set up by the bank, with
an aim to participate in the process of rural development through a multi dimensional approach
to attain sustainable rural development in its operational area. At present, 11 Rural Self
Employment Training Institutes (RSETIs) are providing entrepreneurial development training to
educated unemployed youth at no cost, besides extending the required guidance to the trained
candidates to avail financial assistance from banks. So far, more than 1.17 lakh candidates are
trained in various activities of economic importance and around two-third of the trainees are
settled in gainful employment. The efforts of our Rajahmundry Institute are well recognised by
the Ministry of Rural Development, Government of India and adjudged the Best RSETI in the
Country for the year 2011-12.

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http://www.dsij.in/article-detail/articleid/10301/andhra-bank-q4fy14-result-analysis.aspx

Andhra Bank: Q4FY14 Result Analysis

By Waseem Ahmad | 5/12/2014 10:42 AM Monday

Andhra Bank, a south based public sector lender posted a dismal set of numbers for the quarter
and year ended 31 March, 2014. Net interest income (NII) of the bank remains muted for
Q4FY14 at Rs 950 crore against Rs 953 crore in Q4FY13. However operating profit of the bank
surprisingly went up by 19% to Rs 850 crore in the said period against Rs 714 crore in the same
quarter of previous year on account of decrease in employee cost that went down by almost 52%
to Rs 182 crore during Q4FY14 as compared to Rs 381 crore in the same period last year.

Net profit of the bank recorded massive decline of 74.4% on Y-o-Y basis in Q4FY14 and stood
at Rs 88 crore against Rs 345 crore in the same quarter last year. This decline in net profit was
mainly due to sharp increase in provision made by the bank. Total provision and contingencies of
the bank rose by 95% Y-o-Y to Rs 712 crore in Q4FY14 against Rs 365 crore in Q4FY13. If we
look at the provisioning pattern of the bank during the quarter, Rs 666 crore out of Rs 711 crore
was for non-performing assets where it was Rs 333 crore in Q4FY13.

On the asset quality front, the bank showed marginal improvement during the fourth quarter.
Gross non performing assets (NPAs) ratio of the bank marginally improved to 5.29% in Q4FY14
against 5.55% in Q3FY14. On the other hand, net NPA of the bank also showed improvement on
account of higher provision and stood at 3.11% of net loan assets against 3.65% in Q3FY14.
Moreover, provision and contingencies surged by 66% on quarterly basis to Rs 711 crore in the
said quarter.
Coming to the financials of complete year, the bank's performance for the year is not
satisfactory. NII of the bank went down by 2% to Rs 3697 crore in FY14 against Rs 3757 crore
in FY13. However, the operating profit remained muted and stood at Rs 2760 crore in FY14
against Rs 2767 crore previous year.

At CMP of Rs 64.80 per share, the company is trading at 0.43x times of its book value.

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