The Hindu Business Line : Andhra Bank keen on more fee-based income

THE public sector Andhra Bank, which posted a healthy 30.25 per cent rise in net profit in the third quarter ended December 31, is focusing on increasing non-interest income to keep up profitability.

The bank's non-interest income was 32 per cent in the last quarter and it wants to improve this share in the total income, according to Mr T.S. Narayanasami, Chairman and Managing Director.

He told Business Line that with the income from treasury operations down virtually to nil and the interest from investments going down, the bank is looking at non-interest income, especially from fee-based activities, to bolster its bottomline.

He said the bank has been marketing mutual fund products of a slew of prominent players in the field such as Principal Mutual Fund and UTI Mutual Fund, raking in good returns. It is also actively involved in the bancassurance area.

The "Jeevan Abhaya" scheme, launched in association with Life Insurance Corporation (LIC), has brought in four lakh accounts. Similarly, the "Arogyadhan" scheme with United India Insurance has achieved 75,000 accounts within four months of its launch.

Along with the efforts to step up non-interest income, the bank is also looking at containing the cost of funds. Towards this end, it is going in for more current and savings accounts where the net interest margin is more than the high-cost funds, Mr Narayanasami said. He said the bank has no plans to tap the market again to expand the capital. At 13.2 per cent capital adequacy ratio, it is now in a comfortable position and for further capital infusion, it will take the tier-II capital route, instead of augmenting the tier-I capital where the dividend expectations are high.

On starting offshore operations, he said for opening a branch abroad, the capital requirement would be anything between Rs 100 crore and Rs 150 crore. Unless it is a joint venture, where the investment burden will be shared, there is no gain in opening branches overseas, Mr Narayansami said.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Rupee tad higher; bonds lacklustre

`IT tools must for Basel II compliance'

MDRT membership: Many qualify, but few register

Know Your Customer norms apply to NBFCs

ICICI Bank to float bonds for Rs 400 cr

Andhra Bank keen on more fee-based income

IndusInd Bank to launch debit card for women

AIBOC panel's study on consolidation, FDI policies to be ready soon