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Andhra Bank eyes Rs1.5 lakh cr business by September 2010

Andhra Bank eyes Rs1.5 lakh cr business by September 2010
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First Published: Thu, Jan 01 2009. 04 24 PM IST
Updated: Thu, Jan 01 2009. 04 24 PM IST
Hyderabad: Hyderabad-based public sector bank Andhra Bank has set an ambitious target of achieving Rs1.5 lakh crore of business by September 2010, a growth of some 30% over next 18 months, said its chairman and managing director, R.S. Reddy.
The bank’s business stood at some Rs 95,000 crore by December 2008 with a year-on-year growth of around 31% in advances and around 20% in deposits.
Talking to reporters on the sidelines of a bank’s program to launch new products, Reddy expected the bank to maintain a net interest margin of 3%-3.25% for current fiscal. In the period ended September 2008, the bank’s net interest margin stood at 3.42%.
Having raised Rs200 crore of perpetual bonds under tier-I capital last week at 9.5% coupon rate and with the help of recently carried asset revaluation benefit of around Rs150 crore, the bank would maintain a capital to risk-weighted assets ratio (CRAR) of over 12% even after meeting Basel-II norms, he said.
The bank is still left with headroom of some Rs1,000 crore under tier-II capital, Reddy said the bank plans to raise required capital in tranches based on attractiveness of prevailing coupon rate going forward to maintain a healthy CRAR. The bank’s CRAR stood at 13.43% as at the end of September 2008.
Reddy said the bank has applied to the Reserve Bank of India seeking its nod for the proposed life insurance venture with Bank of Baroda and Legal & General Group of UK and the apex bank’s approval is expected in next couple of weeks. The bank, which will have 30% holding in the insurance venture (Bank of Baroda 44% and Legal & General 26%), expects the venture to seek approval of Insurance Regulatory and Development Authority sometime by month-end to kick start operations by September.
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First Published: Thu, Jan 01 2009. 04 24 PM IST