'Andhra Bank's retail loans to be Rs 100cr'

Agri lending to touch 19% this fiscal

Andhra Bank, over the last 82 years, has evolved from a state level bank to a bank that is now recognised across the country. Andhra Bank's total business, as on September 30, 2004, stood at Rs 38,875 crore and is rendering services through 1,616 business delivery channels consisting of 1,141 branches, 136 extension counters, 294 ATMs and 45 satellite branches spread over 21 states and two Union Territories.

The bank plans to open 50 more branches across the country by the end of the current fiscal, with an aim to spread wings presence to the north and the northeast states as well.

In an interview with Business Standard, T S Narayanasami, chairman and managing director of Andhra Bank, speaks on the bank's short-term plans.

There was a 20 per cent drop in net profit for the second quarter? Do you think the bank can come out of this in the next two quarters?

The bank's drop in the bottomline was mainly due to the one-time Rs 153-crore provisioning it carried out to transfer government securities worth Rs 4,662 crore from its 'available for sale' to 'held to maturity' (HTM) category. The bank availed the Reserve Bank of India's scheme to transfer securities and to be protected from further interest rate rise. If not for this, we would have showed better results.

We are confident that the bank will tide over the losses in the coming two quarters. However, for the bank to withstand the hit, we will have to focus on sound credit deployment, high net interest margins, growth in non-interest income, and reduce percentage of non-performing assets (NPAs).

How has the credit offtake of the bank been during the current financial year?

During the current financial year, the credit offtake has been 'strikingly significant' and has surpassed the level of accretion of resources and the excess liquidity in the system has come down considerably. We expect the bank to have a 17-18 per cent growth in credit offtake by the end of December.

Who are the big corporates that the bank lends to?

Almost all the big corporates in the country are our customers. We have a wide spread in terms of the sectors we lend to and it spreads from infrastructure to steel, power etc. We are happy with our clients and we are also looking at meeting their future requirements.

Where does Andhra Bank stand as far as disbursement to agriculture is concerned? The bank's advances towards the agriculture sector at present are Rs 2,750 crore, which constitutes 18.78 per cent of the net bank credit. Till the end of November this year, the bank's disbursement to the sector was Rs 1,725 crore, an increase of 74.25 per cent over the corresponding period last year.

The total agricultural borrower accounts of the bank has crossed one million and we have till now issued more than four lakh kisan credit cards. The bank has also converted Rs 320 crore of agricultural loans pertaining to 1.85 lakh farmers as term loans and has provided 1.35 lakh new farmers with short-term loans to the extent of Rs 82 crore.

By the end of the current financial year, we expect the advances towards the agriculture sector to cross 19 per cent of the net bank credit, which is higher than the stipulated norm of 18 per cent prescribed by the RBI.

What are the bank's plans in the retail segment? We have been focusing on retail lending this fiscal. Of our total lending portfolio last fiscal, the retail lending was only 22 per cent, while it is 35 per cent so far in the current fiscal. We expect our retail lending portfolio to increase further by the end of this fiscal.

We have also been organising several loan melas across the state and we expect to distribute retail loans to the tune of Rs 100 crore by the end of the current fiscal.

Can you explain the bank's technology upgradation and automation plans?

We are planning to expand our core banking facility to all the branches. At present, the core banking facility is available at 540 branches. We plan to bring all our branches under the core banking network by the end of the current fiscal. We also plan to introduce the 'Any Where Banking' facility in 500 branches across the country and issue chequebooks, which would facilitate this by the end of January.

We have so far in the last four years invested around Rs 200 crore on technology upgradation and in the future also we plan to invest whatever is required.