Andhra Bank on Thursday reported a 20.6 per cent growth in net profit at Rs 386 crore for the quarter ended June 30. The growth was driven by improved net interest income and steadily-growing advances. The bank’s net profit stood at Rs 322 crore in the same quarter last year.
The bank's net interest income (NII) rose 24 per cent to Rs 910 crore, while net interest margin (NIM) improved to 3.77 per cent (from 3.72 per cent).
Chairman and managing director R Ramachandran said though NII was expected to rise, NIM could take a hit of 15-20 basis points in the next quarter, since the bank would not be able to pass on the increase in deposit rates to its borrowers. The bank's advances grew 32.49 per cent to Rs 75,711 crore from Rs 57,144 crore in the year-ago period. However, this credit growth rate did not offer a true picture, said Ramachandran.
He said between April and June 2010, credit offtake was very low, and a large sum that had been sanctioned was actually disbursed in later quarters.