Andhra Bank’s net profit increased 89 per cent at Rs 203 crore in the first quarter ended June 30, 2015, compared to Rs 107 crore in the corresponding quarter last year.

The growth in net profit was driven by reduction in cost of deposits from 7.86 per cent to 7.46 per cent and over all increase in advances, among other factors, its Managing Director and Chief Executive Officer S K Kalra told newspersons at a press conference here on Saturday.

Andhra Bank is looking at raising Rs 3,000 crore capital during the current financial year at an `appropriate’ time via Qualified Institutional Placement, Follow on Public Offer and tier I and tier II bonds. ``At the moment, however, we are not in need of capital,’’ the official added.

The total income of the bank for the first quarter grew by 7.7 per cent to Rs 4,529 cr (Rs 4,205 cr) while net interest income edged up 10.6 per cent to Rs 4,215 cr.

``We have also strengthened balance sheet by improving provision coverage ratio from 48.2 per cent last year to 61.3 per cent at the end of quarter under review,’’ Kalra said, adding that the bank was on a steady recovery path for the last five quarters in a row.

The Net Interest Margin (NIM) too increased from 2.14 per cent to 2.87 per cent. For the full year, Andhra Bank expects to achieve NIM of about 3 per cent. The net and gross non-performing assets improved to 2.99 per cent (3.89 per cent) and 5.75 per cent (5.98 per cent) respectively.

The growth in advances was led by credit to micro, small and medium enterprises and retail. Going forward, it plans to focus on the same sectors.

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