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1QFY2012 Result Update | Banking

August 3, 2011

Andhra Bank
Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT


Source: Company, Angel Research

NEUTRAL
CMP Target Price
% chg (qoq) 5.7 (1.7) 23.3 1QFY11 736 510 320 % chg (yoy) 23.7 37.1 20.4

`134 -

1QFY12 910 700 386

4QFY11 862 712 313

Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

Banking 7,476 1.0 190/124 148,112 10 17,941 5,405 ADBK.BO ANDB@IN

For 1QFY2012, Andhra Bank posted a strong set of numbers with net profit increasing by 23.3% sequentially (up 20.4% yoy) to `386cr, above our estimates of `329cr, mainly due to lower provisioning than built in by us. The sequential 8bp qoq increase in NIM and stable asset quality were the key highlights of the result. We recommend a Neutral rating on the stock. Loan growth healthy; asset quality remains stable: The banks loan book grew sequentially by 6.0% to `75,711cr; however, deposits declined by 1.4% qoq to `90,901cr. Saving deposits increased marginally by 0.5% qoq; however, current deposits declined by 22.1% sequentially, leading to a 122bp qoq decline in CASA ratio to 27.8%. Yield on advances for the bank rose by 63bp qoq to 12.2% in 1QFY2012, one of the highest in the industry. All deposits that had been picked up at a low cost have not been repriced for the bank yet, leading to cost of deposits rising by relatively lesser 54bp qoq as compared to other banks. Consequently, reported NIM of the bank increased by 8bp qoq. During 1QFY2012, CEB income rose by strong 9.9% qoq to `57cr; however, recoveries and forex income declined by 70.9% and 45.4% sequentially to `4.5cr and `185cr, respectively. Gross NPAs increased by 18.2% qoq to `1,176cr, while net NPAs increased by 23.3% qoq to `337cr. The bank has only switched over accounts worth `25lakh and above to system-based NPA recognition until now. Outlook and valuation: At the CMP, the stock is trading at 0.9x FY2013E ABV compared to its five-year range of 0.8x1.4x one-year forward ABV with a median of 1.14x. The stock looks moderately priced at these levels, but considering the near-term asset-quality concerns because of system-based NPA recognition and hefty exposure to the power sector (~23% of the loan book), we recommend Neutral on the stock. Key financials
Y/E March (` cr) NII % chg Net profit % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%)
Source: Company, Angel Research

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 58.0 15.5 13.4 13.2

Abs. (%) Sensex Andhra Bank

3m (3.2) (1.0)

1yr (1.0) (8.9)

3yr 23.1 127.8

FY2010 2,195 34.9 1,046 60.1 2.8 21.6 6.2 1.5 1.3 26.0

FY2011 3,221 46.8 1,267 21.2 3.3 22.6 5.9 1.2 1.3 23.2

FY2012E 3,535 9.8 1,268 0.1 3.0 22.7 5.9 1.0 1.1 18.2

FY2013E 3,740 5.8 1,252 (1.2) 2.7 22.4 6.0 0.9 0.9 15.9

Vaibhav Agrawal
022 3935 7800 Ext: 6808 vaibhav.agrawal@angelbroking.com

Shrinivas Bhutda
022 3935 7800 Ext: 6845 shrinivas.bhutda@angelbroking.com

Varun Varma
022 3935 7800 Ext: 6847 varun.varma@angelbroking.com

Please refer to important disclosures at the end of this report

Andhra Bank | 1QFY2012 Result Update

Exhibit 1: 1QFY2012 performance


Particulars (` cr) Interest earned - on Advances / Bills - on investments - on balance with RBI & others - on others Interest Expended Net Interest Income Other income Other income excl. treasury - Fee Income - Treasury Income - Recoveries from written off a/c - Others Operating income Operating expenses - Employee expenses - Other Opex Pre-provision Profit Provisions & Contingencies - Provisions for NPAs - Provisions for Investments - Other Provisions PBT Provision for Tax PAT Effective Tax Rate (%)
Source: Company, Angel Research

1QFY12 4QFY11 % chg (qoq) 1QFY11 % chg (yoy) 2,634 2,165 453 5 12 1,724 910 217 158 57 59 4 96 1,127 428 273 155 700 177 117 2 58 523 137 386 26.2 2,363 1,918 409 7 30 1,502 862 299 234 52 65 15 166 1,161 449 298 151 712 303 203 0 100 409 96 313 23.5 11.5 12.9 10.7 (23.9) (61.2) 14.8 5.7 (27.4) (32.6) 9.9 (9.0) (70.9) (42.4) (2.9) (4.8) (8.3) 2.1 (1.7) (41.5) (42.3) (41.8) 27.9 42.7 23.3 273bp 1,865 1,499 357 8 1 1,129 736 208 161 57 48 9 94 944 434 287 147 510 52 17 (0) 35 458 138 320 30.1 41.2 44.4 26.8 (34.4) 857.1 52.7 23.7 4.2 (1.8) 24.6 (51.0) 1.8 19.4 (1.5) (4.8) 5.1 37.1 240.4 574.1 66.8 14.0 (0.7) 20.4 (389)bp

Exhibit 2: 1QFY2012 Actual vs. Angel estimates


Particulars (` cr) Net interest income Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Company, Angel Research

Actual 910 217 1,127 428 700 177 523 137 386

Estimates 899 211 1,110 443 667 198 469 141 329

Var. (%) 1.3 2.7 1.6 (3.4) 4.8 (10.7) 11.4 (2.7) 17.4

August 3, 2011

Andhra Bank | 1QFY2012 Result Update

Exhibit 3: 1QFY2012 performance


Particulars Balance sheet Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Current deposits (` cr) Saving deposits (` cr) CASA deposits (` cr) CASA ratio (%) CAR (%) Tier 1 CAR (%) Profitability Ratios (%) Cost of deposits Yield on advances Yield on investments Yield on funds Cost of funds Reported NIM Cost-to-income ratio Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) Provision Coverage Ratio (%) Slippage ratio (%) NPA to avg. assets (%)
Source: Company, Angel Research

1QFY12 4QFY11 75,711 90,901 83.3 5,581 19,721 25,302 27.8 13.2 8.9 7.0 12.2 7.7 9.7 6.4 3.8 37.9 1,176 1.6 337 0.5 82.0 1.4 0.4 71,435 92,156 77.5 7,160 19,619 26,779 29.1 14.4 9.7 6.5 11.6 7.4 9.2 5.9 3.7 38.7 996 1.4 274 0.4 83.9 1.4 0.8

% chg (qoq) 1QFY11 6.0 (1.4) 577bp (22.1) 0.5 (5.5) (122)bp (115)bp (77)bp 54bp 63bp 25bp 54bp 52bp 8bp (75)bp 18.2 17bp 23.3 7bp (193)bp (2)bp (37)bp 57,144 74,700 76.5 5,190 16,900 22,089 29.6 13.3 7.8 5.5 10.9 6.8 8.6 5.2 3.7 46.0 579 1.0 170 0.3 85.9 1.0 0.1

% chg (yoy) 32.5 21.7 679bp 7.5 16.7 14.5 (174)bp (2)bp 112bp 153bp 134bp 90bp 116bp 118bp 5bp (802)bp 103.1 54bp 98.7 15bp (386)bp 34bp 34bp

Advances growth strong; deposits decline sequentially


The banks loan book grew sequentially by 6.0% to `75,711cr; however, deposits declined by 1.4% qoq to `90,901cr. Consequently, the CD ratio increased from 77.5% in 4QFY2011 to 83.3% in 1QFY2012. Saving deposits increased marginally by 0.5% qoq; however, current deposits declined by 22.1% qoq, leading to a 122bp qoq decline in CASA ratio to 27.8%. The bank opened eight branches and 31 ATMs during 1QFY2012 and plans to open another 100 branches during FY2012, mostly in areas outside Andhra Pradesh, such as Maharashtra and Gujarat.

August 3, 2011

Andhra Bank | 1QFY2012 Result Update

Exhibit 4: Advances growth strong for 1QFY2012


Adv. qoq chg (%) 15.0 10.0 5.0 76.5 77.1 Dep. qoq chg (%) 79.9 CDR (%, RHS) 83.3 85.0 80.0 75.0

Exhibit 5: CASA ratio declines by 122bp qoq


CASA ratio 31.0 30.0 29.0 28.0 19.2 18.6 17.0 17.1 14.5 CASA yoy growth (%, RHS) 25.0 20.0 15.0 10.0

77.5

8.9 12.3

1.8

6.0 5.2

8.3 4.5

29.6

30.4

28.5

29.1

(3.8)

(1.4)

65.0 60.0

(5.0)

26.0 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12


Source: Company, Angel Research

27.8

6.0

70.0

27.0

5.0 -

1QFY11 2QFY11 3QFY11 4QFY11 1QFY12


Source: Company, Angel Research

NIM rises sequentially


The banks yield on advances rose by 63bp qoq to 12.2% in 1QFY2012, one of the highest in the industry. All deposits that had been picked up at a low cost have not been repriced for the bank yet, leading to cost of deposits rising by relatively lesser 54bp qoq as compared to other banks. Consequently, reported NIM increased by 8bp qoq. Management is expecting further upward repricing of deposits in the coming quarters, leading to some pressures on NIM. We have factored in a decline of 30bp in NIM for FY2012 and FY2013, respectively.

Exhibit 6: Yield on advances cross 12% in 1QFY2012...


12.40 12.00 11.60 11.20 10.80 10.40 10.00 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 10.89 10.98 11.07 11.60 12.23

Exhibit 7: ...leading to an 8bp qoq rise in reported NIM


4.00 3.91 3.91 3.77 3.69

3.80

3.72

3.60

3.40 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12

Source: Company, Angel Research

Source: Company, Angel Research

CEB income strong; forex income declines


During 1QFY2012, CEB income rose by strong 9.9% qoq to `57cr; however, recoveries and forex income declined by 70.9% and 45.4% sequentially to `4.5cr and `185cr, respectively. Other income also declined by 27.0% qoq, leading to a 27.4% qoq drop in non-interest income. Management has guided for 1820% growth in fee income for FY2012.

August 3, 2011

Andhra Bank | 1QFY2012 Result Update

Asset quality remains stable


Slippages were stable with annualised slippage ratio of 1.4% for 1QFY2012, a marginal decline of 2bp over 4QFY2011. Gross NPAs increased by 18.2% qoq to `1,176cr, Net NPAs increased by 23.3% qoq to `337cr. As of 1QFY2012, the gross NPA ratio stood at 1.6% (1.4% in 4QFY2011) and net NPA ratio stood at 0.5% (0.4% in 4QFY2011). Provision coverage ratio including technical write-offs stood at 82.0% (83.9% in 4QFY2011). The bank has only switched over accounts worth `25lakh and above to systembased NPA recognition until now. The bank has to complete the switchover of the rest of the accounts by next quarter and, hence, we have built in a slippage ratio of 1.6% for FY2012 (1.4% in FY2011).

Exhibit 8: NPA ratios remain stable


Gross NPAs (%) 2.0 1.5 1.0 78.9 0.5 85.9 83.9 82.0 80.4 80.0 85.0 Net NPAs (%) PCR (%, RHS) 90.0

Exhibit 9: Lower credit cost for 1QFY2012


Slippages (%) 2.0 1.5 1.0 0.4 0.6 0.4 Credit cost (%, RHS) 0.8 1.0 0.8 0.6 0.4

1.8

0.5 -

1.0 0.3

1.3 0.5

1.3 0.5

1.4 0.4

1.6 0.5

1.0

1.5

1.4

1QFY11 2QFY11 3QFY11 4QFY11 1QFY12


Source: Company, Angel Research

75.0

1.4

0.1

0.2 -

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

Source: Company, Angel Research; Note: PCR including tech. write-offs

Employee costs decline qoq


Operating expenses decreased by 4.8% qoq to `428cr on the back of an 8.3% qoq decline in employee costs due to a high base in 4QFY2011 owing to pension costs related to retired employees. Consequently, the cost-to-income ratio improved to 37.9% in 1QFY2012 from 38.7% in 4QFY2011.

Exhibit 10: Employee expenses decline in 1QFY2012


Staff expenses (`cr) QoQ growth (% , RHS)

Exhibit 11: Declining opex to avg. assets


Cost-to-income ratio (%) 60.0 50.0 40.0 30.0 1.9 1.8 1.7 1.7 1.5 Opex to average assets (%, RHS) 2.5 2.0 1.5 1.0

325 250 175

17.7 14.7

20.0 10.0

(0.2)

287

260

260

298

273

46.0

42.1

39.7

38.7

25 (50)

(10.0) (20.0)

10.0 -

37.9

100

(9.4)

(8.3)

20.0

0.5 -

1QFY11 2QFY11 3QFY11 4QFY11 1QFY12

1QFY11 2QFY11 3QFY11 4QFY11 1QFY12


Source: Company, Angel Research

Source: Company, Angel Research

August 3, 2011

Andhra Bank | 1QFY2012 Result Update

Investment arguments
One of the best asset qualities among peers
The banks asset quality is one of the best among PSU banks, with gross NPAs and net NPAs of 1.6% and 0.5% (as of 1QFY2012), respectively, and a healthy coverage ratio of 82.0%, including technical write-offs. Credit cost for the bank is low at 0.5% (as of FY2011) of average assets, though in our view in the near term the bank may see some pressures due to system-based NPA recognition and high interest rates.

Investment concerns
Continual weak performance in fee income and likely drop in margins to be a drag on profitability
During the last four years (FY200711), fee income (non-interest income excluding treasury) has risen at a CAGR of only 12.8% compared to advances growing at a CAGR of 26.5%. This resulted in fee income dropping to 0.8% of average assets (as of FY2011) from 1.1% in FY2007. We expect the weak performance with regards to fee income to continue and, hence, have estimated moderate growth of 11.2% and 14.4% in FY2012 and FY2013, respectively. The bank has one of the highest yields in the industry (12.2% as of 1QFY2012), also reflected in the relatively stronger calculated NIM of 3.3% (as of FY2011). Although reported NIM rose sequentially by 8bp during 1QFY2012, the cost of deposits increased substantially by 63bp qoq to 7.0%. With a further upward repricing of deposits expected in the coming quarters, the banks NIM is likely to be under pressure going forward. The bank also has a relatively weaker liability profile with a calculated CASA base of sub-30% at 27.8%. Accordingly, we have built in a 28bp decline in calculated NIM for FY2012 and a further 31bp decline for FY2013.

August 3, 2011

Andhra Bank | 1QFY2012 Result Update

Outlook and valuation


The banks asset quality is one of the best among PSU banks, with gross NPAs and net NPAs of 1.6% and 0.5% (as of 1QFY2012), respectively, and a healthy coverage ratio of 82.0%, including technical write-offs. There could be upside risks to our earnings estimates if the bank can continue to maintain its current high yield on advances without compromising on asset quality. At the CMP, the stock is trading at 0.9x FY2013E ABV compared to its five-year range of 0.8x1.4x one-year forward ABV with a median of 1.14x. The stock looks moderately priced at these levels, but considering the near-term asset-quality concerns because of system-based NPA recognition and hefty exposure to the power sector (~23% of the loan book), we recommend Neutral on the stock.

Exhibit 12: Key assumptions


Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages Coverage Ratio
Source: Angel Research

Earlier estimates FY2012 16.0 20.0 28.0 3.0 1.3 8.0 15.0 1.5 80.0 FY2013 16.0 16.0 27.8 2.7 14.0 13.0 15.0 1.6 75.0

Revised estimates FY2012 16.0 20.0 28.0 3.0 0.2 7.0 14.0 1.6 81.0 FY2013 16.0 16.0 27.8 2.7 13.1 13.0 15.0 1.8 74.0

Exhibit 13: Change in estimates


FY2012 Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research

FY2013 Earlier estimates 3,766 1,036 4,802 2,142 2,660 668 1,992 646 1,346 Revised Var. (%) estimates 3,740 1,016 4,756 2,123 2,634 780 1,854 601 1,252 (0.7) (1.8) (0.9) (0.9) (1.0) 16.8 (6.9) (6.9) (6.9)

Earlier estimates 3,547 909 4,456 1,883 2,572 660 1,912 574 1,338

Revised Var. (%) estimates 3,535 899 4,434 1,866 2,567 756 1,811 543 1,268 (0.3) (1.1) (0.5) (0.9) (0.2) 14.5 (5.3) (5.3) (5.3)

August 3, 2011

Andhra Bank | 1QFY2012 Result Update

Exhibit 14: P/ABV band


Price (`) 200 180 160 140 120 100 80 60 40 20 0 0.6x 0.8x 1x 1.2x 1.4x

Oct-05

Feb-08

Nov-02

Sep-08

May-06

Nov-09

Jun-03

Jan-04

Jun-10

Dec-06

Apr-02

Aug-04

Apr-09

Jan-11

Jul-07

Aug-11

Mar-05

Source: Company, Angel Research

August 3, 2011

Mar-12

Andhra Bank | 1QFY2012 Result Update

Exhibit 15: Recommendation summary


Company AxisBk FedBk HDFCBk ICICIBk* SIB YesBk AllBk AndhBk BOB BOI BOM CanBk CentBk CorpBk DenaBk IDBI# IndBk IOB J&KBk OBC PNB SBI* SynBk UcoBk UnionBk UtdBk VijBk Reco. Buy Buy Accumulate Buy Buy Accumulate Neutral Neutral Buy Buy Buy Buy Neutral Buy Neutral Neutral Buy Buy Neutral Accumulate Accumulate Buy Buy Neutral Buy Buy Neutral CMP (`) 1,308 406 482 1,002 23 307 197 134 875 373 54 427 110 488 84 125 217 133 883 338 1,093 2,279 117 81 278 90 62 Tgt. price (`) 1,648 478 519 1,324 26 353 1,018 434 65 516 608 255 155 383 1,217 2,845 139 327 107 Upside (%) 26.0 17.7 7.7 32.2 15.1 14.8 16.4 16.2 19.6 20.8 24.5 17.4 16.3 13.2 11.4 24.9 19.0 17.7 18.7 FY2013E P/ABV (x) 2.1 1.1 3.3 1.8 1.2 2.0 0.9 0.9 1.2 1.0 0.7 0.8 0.8 0.8 0.6 0.8 0.9 0.8 0.9 0.8 1.3 1.7 0.8 0.9 1.0 0.8 0.8 FY2013E Tgt P/ABV (x) 2.7 1.3 3.5 2.4 1.4 2.3 1.4 1.2 0.9 1.0 1.0 1.0 1.0 0.9 1.4 2.1 0.9 1.2 0.9 FY2013E P/E (x) 10.8 8.4 16.8 14.2 7.0 10.3 5.5 6.0 6.6 5.8 5.1 4.9 5.3 4.5 4.0 5.8 4.6 5.1 5.9 5.7 6.8 8.4 4.9 4.7 5.9 6.0 6.7 FY11-12E EPS CAGR (%) 20.9 19.0 30.5 25.8 11.6 19.1 9.2 (0.6) 10.8 18.7 30.8 (2.4) (14.0) 6.1 7.0 13.0 10.4 22.4 8.8 7.5 7.4 44.2 14.6 16.5 20.0 6.1 61.9 FY2013E RoA (%) 1.5 1.2 1.7 1.5 0.9 1.2 0.9 0.9 1.1 0.8 0.6 0.9 0.5 0.9 0.8 0.7 1.4 0.7 1.2 0.9 1.0 1.1 0.7 0.6 0.8 0.5 0.4 FY2013E RoE (%) 21.0 13.9 20.9 16.0 17.2 20.6 17.8 15.9 19.6 18.0 14.8 17.2 14.4 17.9 16.5 14.3 20.4 16.4 17.0 14.4 20.0 22.6 17.0 17.1 17.9 12.5 11.7

Source: Company, Angel Research; Note: *Target multiples=SOTP Target Price/ABV (including subsidiaries); # without adjusting for SASF

August 3, 2011

Andhra Bank | 1QFY2012 Result Update

Income statement
Y/E March (` cr) NII - YoY growth (%) Other income - YoY growth (%) Operating income - YoY growth (%) Operating expenses - YoY growth (%) Pre-prov. profit - YoY growth (%) Prov. & cont. - YoY growth (%) PBT - YoY growth (%) Prov. for taxation - as a % of PBT PAT - YoY growth (%) FY07 1,418 21.3 522 12.5 1,940 18.8 933 8.8 1,007 29.8 222 1.8 785 40.8 247 31.5 538 10.8 FY08 1,340 (5.5) 626 19.9 1,966 1.3 909 (2.6) 1,057 5.0 139 (37.2) 918 16.9 342 37.3 576 7.0 FY09 1,627 21.5 765 22.2 2,392 21.7 1,104 21.5 1,288 21.9 390 179.9 898 (2.1) 245 27.3 653 13.5 FY10 2,195 34.9 965 26.0 3,159 32.1 1,350 22.2 1,810 40.5 374 (4.1) 1,436 59.9 390 27.2 1,046 60.1 FY11 3,221 46.8 897 (7.0) 4,118 30.3 1,705 26.3 2,413 33.3 646 72.8 1,767 23.1 500 28.3 1,267 21.2 FY12E 3,535 9.8 899 0.2 4,434 7.7 1,866 9.5 2,567 6.4 756 17.0 1,811 2.5 543 30.0 1,268 0.1 FY13E 3,740 5.8 1,016 13.1 4,756 7.3 2,123 13.7 2,634 2.6 780 3.1 1,854 2.3 601 32.4 1,252 (1.2)

Balance sheet
Y/E March (` cr) Share Capital Reserves & Surplus Deposits - Growth (%) Borrowings Tier 2 Capital Other Liab. & Prov. Total Liabilities Cash Balances Bank Balances Investments Advances - Growth (%) Fixed Assets Other Assets Total Assets - Growth (%) FY07 485 2,671 41,454 22.2 734 480 1,717 47,541 2,949 1,075 14,301 27,889 26.2 192 1,135 47,541 16.9 FY08 485 2,764 19.3 591 1,115 2,201 4,902 793 FY09 485 3,162 20.1 1,311 2,040 2,081 4,853 434 FY10 485 3,925 77,688 30.8 2,832 3,020 2,392 6,699 4,469 20,881 56,114 27.1 356 1,825 31.9 FY11 560 5,933 18.6 4,620 3,020 2,612 7,184 3,275 24,204 71,435 27.3 317 2,485 20.5 FY12E 560 6,876 20.0 5,527 3,503 3,243 7,188 3,257 FY13E 560 7,803 16.0 6,412 4,064 4,024 8,338 3,779

49,437 59,390

92,156 110,588 128,282

56,592 68,469

90,342 108,901 130,296 151,143

14,898 16,911 34,238 44,139 22.8 219 1,542 19.0 28.9 335 1,796 21.0

33,644 39,040 82,865 96,123 16.0 368 2,973 19.6 16.0 415 3,449 16.0

56,592 68,469

90,342 108,901 130,296 151,143

August 3, 2011

10

Andhra Bank | 1QFY2012 Result Update

Ratio analysis
Y/E March Profitability ratios (%) NIMs Cost to Income Ratio RoA RoE B/S ratios (%) CASA Ratio Credit/Deposit Ratio CAR - Tier I Asset Quality (%) Gross NPAs Net NPAs Slippages Loan Loss Prov. /Avg. Assets Provision Coverage Per Share Data (`) EPS ABVPS (75% cover.) DPS Valuation Ratios PER (x) P/ABVPS (x) Dividend Yield DuPont Analysis NII (-) Prov. Exp. Adj. NII Treasury Int. Sens. Inc. Other Inc. Op. Inc. Opex PBT Taxes RoA Leverage RoE 3.2 0.5 2.7 0.1 2.8 1.1 3.9 2.1 1.8 0.6 1.2 14.6 17.8 2.6 0.3 2.3 0.2 2.5 1.0 3.5 1.7 1.8 0.7 1.1 16.3 18.0 2.6 0.6 2.0 0.4 2.3 0.9 3.2 1.8 1.4 0.4 1.0 18.1 18.9 2.8 0.5 2.3 0.4 2.7 0.8 3.5 1.7 1.8 0.5 1.3 19.7 26.0 3.2 0.6 2.6 0.1 2.7 0.8 3.5 1.7 1.8 0.5 1.3 18.3 23.2 3.0 0.6 2.3 0.0 2.4 0.7 3.1 1.6 1.5 0.5 1.1 17.2 18.2 2.7 0.6 2.1 0.0 2.1 0.7 2.8 1.5 1.3 0.4 0.9 17.8 15.9 12.0 2.1 2.8 11.3 2.0 3.0 9.9 1.8 3.4 6.2 1.5 3.7 5.9 1.2 4.1 5.9 1.0 3.7 6.0 0.9 3.7 11.1 65.1 3.8 11.9 67.0 4.0 13.5 75.2 4.5 21.6 90.9 5.0 22.6 116.0 5.5 22.7 132.9 5.0 22.4 148.8 5.0 1.4 0.2 1.1 0.2 88.1 1.1 0.2 0.7 0.2 85.6 0.8 0.2 0.6 0.3 78.5 0.9 0.2 0.9 0.4 80.4 1.4 0.4 1.4 0.5 72.5 2.3 0.6 1.6 0.5 81.0 3.1 1.0 1.8 0.5 74.0 34.5 67.3 11.3 10.0 33.6 69.3 11.6 8.5 31.4 74.3 12.2 8.0 29.4 72.2 12.9 7.6 29.1 77.5 13.3 9.0 28.0 74.9 12.8 8.6 27.8 74.9 12.6 8.3 3.3 48.1 1.2 17.8 2.7 46.2 1.1 18.0 2.7 46.2 1.0 18.9 2.8 42.7 1.3 26.0 3.3 41.4 1.3 23.2 3.0 42.1 1.1 18.2 2.7 44.6 0.9 15.9 FY07 FY08 FY09 FY10 FY11 FY12E FY13E

August 3, 2011

11

Andhra Bank | 1QFY2012 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Andhra Bank No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

August 3, 2011

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