Description
It describes about Industry Trends of banking industry, PEST Analysis of banking Industry, Competitor Analysis, SWOT analysis, Company Description, General Information Andhra bank, it's Finance performance, SWOT analysis and Various Strategies employed.
Report on Andhra Bank- Industry and Company Analysis
Indian and Global Perspective The Indian banking sector has evolved into a robust banking system, emerging as one of the strong pillars of stability and growth in the Indian economy over the past decade. The growth of the sector has been largely facilitated by higher disposable income and savings in financial assets by Indian households. While the growth in the sector has been healthy, the penetration of the banking industry in India has been relatively low, mostly in the low income clustered regions such as rural and semi-urban areas. As emerging technologies and innovative channels continue to transform the banking industry, our role as stakeholders in transformation will be to anticipate and gear up the banking system for future opportunities and challenges. While under penetration will remain a key focus area of banks, a number of recent initiatives by RBI such as new licenses to private banks and savings rate deregulation is expected to increase competition in the industry. Thus, banks will have to address contrasting challenges of expanding their reach as well as rising competition in the coming decade for their share of the wallet. Similarly, there is contrasting set of challenges for banks related to customer information. Banks will have to create segregated strategies to service customers based on advanced business analytics. On the other hand, banks will have to increase their customer base among rural customers and SME?s for which information access is low. Creating interoperability across platforms and channels will emerge as another key challenge for banks. While innovation through channels such as mobile gain momentum in the coming years, interoperable systems will be needed to leverage technology through these channels where customers have savings account and mobile number portability. Government initiatives through the „Unique Identification Authority of India?(UIDAI) will provide impetus in improving financial access forth rural population while innovations through the payment system and effective business models will be critical in achieving financial inclusion goals. Financial inclusion and Infrastructure spending will emerge as the two key growth drivers for Indian banks in the coming decade.
Structure of Indian Banking Industry
Banks in India are classified into commercial banks (scheduled commercial banks or SCBs, and non-scheduled commercial banks) and co-operative credit institutions (that include various co-operative banks). The SCBs are further classified into public sector banks (PSBs),private banks, foreign banks and regional rural banks (RRBs). As can be seen in the charts above, although the RRBs and co-operative banks constitute 65% of the total number, they only cater to 5.6 %of the total business. As against this, SCBs (excluding RRBs i.e. SBI and its associates, nationalised banks, private banks and foreign banks) form only 35% of the total number but cater to around 94% of the total business of banks. This implies the domination and pivotal role of SCBs excluding RRBs in the Indian banking sector. Factors Shaping the future of Indian Banking Industry The Planning Commission of India in its Twelfth Five Year Plan (2012-2017) has envisaged a GDP growth of 9-9.5%. The Government?s thrust on infrastructure development along with private sector investment will be one of the key drivers for accelerating investment demand.
Financial Inclusion Financial Inclusion In India as compared to some major countries in 2010
India has been lagging behind major economies in achieving financial inclusion over the years. The extent of financial exclusion in low income dominated regions is even more staggering with only 30,000 habitation out of 600,000 habitations, having access to financial services. This means that almost 95% of the habitations (which are largely based in the rural and semi-urban region) have limited or no access to adequate financial services. Primary sectors as well as micro, small and medium enterprises (MSMEs) provide enormous potential to strengthen the domestic economy.
Enhancement and Inprovement In Payment System As per the Capgemini?s World Payment Report 2011, India is the eleventh largest non-cash payment market in the world. While majority of the volume of transactions currently are paper based, non-cash and electronic transactions are steadily gaining prominence. The market share of cards has increased from six to 19%. Payment system infrastructure have expanded steadily over the past few years with emergence of new payment system, growing acceptance of new delivery channels, increased number of ATMs (80,000+) and augmentation of payment processing infrastructure. The use of services provided by payment service facilitators such as intermediaries, technology solution providers and merchant acquirers gained ground in the industry during this period.
Emerging Trends in Indian Banking Technology Innovation will provide the edge. The banking system in India is set to undergo significant transformation in the coming years driven by financial inclusion, innovation in payment system and emergence of new channel such as mobile banking. Technology will emerge as the main differentiator as competition in the banking space increases. Banks will have to become increasingly agile to adopt as well as adapt to innovations in technology. As financial inclusion gains traction, banks will have to increasingly adopt branchless banking models owing to their low infrastructure cost as compared to running physical branches. A study by CGAP has identified four main business models to better understand the choices the industry faces in pursuit of viable models in
Conclusion The transformation in the Indian banking sector in the coming decade will be defined by the steps taken to achieve financial inclusion. Banks will focus on re-engineering their services as well as branches to gain strong foothold in low-income dominated regions such as rural areas and lower tier cities. The banking industry will also witness tremendous Innovations in the form of low-cost products and services, delivery channels and new technologies that will enable banks to make banking a viable business model in these regions. Payment systems are expected to largely migrate towards electronic platform as internet banking and mobile banking gain prominence in India. Nonetheless, the banking system will require robust infrastructure to implement emerging payment systems. Government initiatives towards building the Aadhaar Enabled Payment System is expected to boost the efforts of banks in achieving their financial inclusion goals. Besides financial inclusion, the banking sector will witness significant innovations in banking products and services catering to MSMEs, corporates and HNIs.
Introduction Andhra Bank is a medium-sized public sector bank (PSB), providing wide range of banking and financial services. It is engaged in providing retail banking, corporate banking, treasury and other banking services. The bank is a depository participant with Central Depository Service Limited (CDSL) and National Securities Depository Limited (NSDL).It has a network of 1,712 branches, 15 extension counters, 38 satellite offices and 1056 automated teller machines (ATMs) as on March 31, 2012. It has a total strength of 15099 staff members. History Andhra Bank was founded by the eminent freedom fighter, Dr. Bhogaraju Pattabhi Sitaramayya in 1923 in Machilipatnam, Andhra Pradesh. The Bank was registered on November 20, 1923 and commenced business on 28 November 1923 with a paid up capital of Rs 1.00 lakh and an authorised capital of Rs 10.00 lakhs. In 1956, linguistic division of States was promulgated and Hyderabad was made the capital of Andhra Pradesh. The registered office of the Bank was subsequently shifted to Andhra Bank Buildings, Sultan Bazar, Hyderabad, Andhra Pradesh. In the second phase of nationalization of commercial banks commenced in April 1980, the bank became a wholly owned Government bank. In 1964, the bank merged with Bharat Lakshmi Bank and further consolidated its position in Andhra Pradesh. Shareholding Pattern The Government of India owns 51.55% of its share capital and is going to increase it to 58% by infusing 1100 crore. The state owned Life Insurance Corporation of India holds 10% of the shares. Corporate bodies hold 2.2% and individual shareholders hold 9.98% of the shares. The bank has done a total business of Rs. 1,90,535 crore as on 31.03.2012. Top management The Bank?s Board is headed by the Chairman and Managing Director who is appointed by Central Government in consultation with Reserve Bank of India. Shri B A Prabhakar is the current Chairman and managing director. A whole time Director (Executive Director) of the bank appointed by Central Government in consultation with Reserve Bank Of India is also member of the Board. Sri A A Taj and Sri K K Mishra are the current executive directors. Products and Services The products and services provided by the bank are mainly categorized into businesses of Retail, Corporate, NRI, MSME, and Agricultural industries. Under the Retail Business, the bank offers Deposits, Loans, Cards, DMAT Services, Payment Services, Insurance, and Mutual Funds to individual customers. Under the Corporate Business, the bank offers Loans & Advances, Project Appraisal services, and Syndication of Loans to the business entities. Under the NRI business segment, the bank offers Deposit schemes, Loans, Remittance services, and Investment services to the Non Resident Indians. Under the MSME business
segment, the bank offers different schemes that aimed at providing loan and transaction services to Micro Small and Medium Enterprises (MSME). Some of the MSME schemes available are OTS Scheme, Composite loan scheme, Open cash credit (OCC), Artisans Credit Card (ACC), AB Laghu Udhyami Credit Card (LUCC), AB Power Tools (Shakti), Technology upgradation fund scheme (TUFs), Credit guarantee fund trust for small industries (CGTSI), AB Doctor Plus etc. Under the Agriculture business segment, bank provides different credit schemes to farmers, Women Empowerment schemes, and Andhra Bank Rural Development Trust (ABRDT) helps Rural Self Employment Training Institutes (RSETIs). Financial Performance The Bank continued to grow well showing a good performance during the Financial Year 2011-12. Profitability parameters saw satisfactory growth. Total Income increased by 32.8% from ` 9,188 Crore to 12,199 Crore while NonInterest Income (excluding Profit on Sale of Investments) stood at 739 Crore compared to 756 Crore in the previous year. Operating Profit of the Bank increased to 2,815 Crore from 2,413 Crore, registering an increase of 16.7%. NetProfit increased by 6.1% to 1,345 Crore in 2011-12 from 1,267 Crore in the previous year Total Business increased to 1,90,535 crore from 1,64,311 crore in 2010-11, registering a growth rate of 16.0%. Total Deposits increased to 1,05,851 crore from 92,156 crore in the previous year, registering a growth rate of 14.9%. CASA Deposits increased to 27,947 crore from 26,779 crore, registering a growth rate of 4.4%. Cost of Deposits stood at 7.51% Net Interest Margin stood at 3.67%. Non-Interest Income from Core Operations stood at 739 crore . Core Operating Profit (excluding Profit on sale of Investments) of the Bank increased to 2694 crore, recording a growth rate of 18.6%. Earnings per Share (EPS) stood at 24.03. Gross NPAs to Gross Advances Ratio stood at 2.12%. Net NPAs to Net Advances Ratio stood at 0.91% . Networth of the Bank increased to 7,480 crore from 6,493 crore. Average Business Per Employee increased to 11.5 crore from 9.59 crore Credit Deposit Ratio increased to 80.07% from 78.46%.
Peer comparision Company State bank of india Bank of Baroda Punjab Natl Bank Bank of India Canara Bank IDBI Bank Union Bank Indian Bank Allahabad Bank Oriental Bank iOB Andhra Bank Corporation Bank Syndicate Bank Central bank Strengths Andhra bank has taken many IT initiatives to improve customer service like Bank has launched e-Donations facility for donations to Shri Siddhivinayak Temple, Mumbai. Customer of any Bank having Mobile Banking Facility can donate funds by sending an SMS in a prescribed format to 8108114400 with MMID (Mobile Identification Number) 9011111. Bank introduced a new Loan Scheme for practicing Professionals named “AB Professional Loan” from 30.01.2012, to cater to the potential segment comprising of practising Chartered Accountants, Architects, Engineers, Valuers, Management & Financial Consultants, companySecretaries, Cost Accountants, etc. Bank recently launched a new Product named “Abhaya First Wealth Pack” in all its branches, combining features of four products, viz., Recurring Deposit, Savings Bank Account, Unit Linked Plan (Equity Option) and Life Insurance Cover. This is available in three denominations of Silver (` 25,000/-), Gold (` 50,000/-) and Platinum (` 1,00,000/-). Management of Non-Performing Assets has been the Core Strategy of the Bank. Gross NPAs could be contained at Rs.1798 crore, forming 2.12% of Gross Advances, while Net NPAs at ` 756 crore are lower at 0.91%. Total Branches increased from 1632 at the end of Financial Year 2010-11 to 1712 at the end of Financial Year 2011-12. Other delivery channels include 1056 ATMs,15 Extension Counters and 38 Satellite offices as on 31.03.2012. We also have 1127 Branchless Banking Units (Business Correspondents). Market Cap (Rs in Crore) 143,236.84 28,815.00 27,777.15 18,644.98 17,810.82 11,838.08 10,562.30 7,903.47 6,997.92 6,961.39 6,575.25 6,256.10 6,133.32 6,043.58 5,605.55 EV/EBIDTA 14.68 14.70 13.82 14.07 12.24 13.51 13.89 12.50 12.98 12.18 13.41 11.81 12.23 13.82 13.64
The Total Business (Total Deposits plus Gross Bank Credit) of the Bank registered a growth rate of 16.0%, up from 1,64,310 Crore as on 31.3.2011 to 1,90,535 Crore as on 31.3.2012. Weakness Limited advertising as compared to leading competitors like SBI. Small range of products in some sectors. Low market capitalisation as compared to its competitors. Oppurtunities Use of technology for value added services Andhra Bank, UK's Legal In Joint Venutre For New Life Insurance. The Reserve Bank injected durable primary liquidity of over Rs.2 trillion through open market operations (OMOs) purchase and a 125 basis point reduction in Cash ReserveRatio (CRR) to address the structural liquidity deficit. Despite the slowdown in domestic growth and the recent oil price increase, Indian equity markets stayed upbeat in Q4 of 2011-12 Increased capital outlays in the latest budget and brisk pace of tendering of road projects suggest some improvement in investment in latter part of 2012-13. The recent firming up of growth fundamentals in the US coupled with policy measures in the euro area have helped abate fears of a double dip recession in the advanced economies (AEs). Threats Global uncertainties and domestic cyclical and structural factors lowered the growth of Indian economy to below seven per cent in 2011-12 as compared to the growth rate of 8.4 per cent for 2010-11. The growth slowdown has been driven by a sharp fall in investment. Net capital inflows fell short of the current account deficit (CAD), resulting in a substantialdrawdown of Reserves. Energy prices are likely to remain a significant source of inflation ahead, as suppressed domestic prices of oil, coal and electricity prices are adjusted upwards. Growth in Aggregate Deposits in Banking sector has been lower than the corresponding period of the previous year Strategies
Retail Lending In order to consolidate and improve upon the quality of the portfolio, Bank had to put focused efforts on Recoveries. The major growth drivers were Housing Loans and Non-Agricultural Gold Loans. In the Fourth Quarter of the Financial Year 2011-12, interest rates on Housing Loans and Vehicle Loans were revised in line with market particularly to build up high end portfolio of above 20 lakhs. Attractive new products were launched in this Financial Year aiming at Doctors and other professionals like Chartered Accountants, Company Secretaries, Engineers, Architects, Management Consultants, etc. A Special Scheme “AB Swarna Loan” Scheme was launched to increase NonAgricultural Gold Loans. A Special Scheme was launched for financing Cars to Corporate Clients. Joint Venture/Tie ups Andhra bank is having Joint Venture in Insurance with Bank of Baroda and Legal and General Plc of UK christened “India First Life Insurance Co. Ltd”. The Bank?s stake in the venture is 30% while Bank of Baroda holds 44% and Legal and General Plc holds 26% stake. The Bank along with Bank of Baroda and Indian Overseas Bank, has entered into a tie up for setting up a Banking Subsidiary in Malaysia. With a view to be associated with one of the major commodity exchanges, Andhra Bank has a tie up with the Multi Commodity Exchange (MCX-SX) Ltd. Risk Management Risk Management in treasury operations has been strengthened further by undertaking stress testing and back testing of the investment portfolio at quarterly intervals. New Products Launched An innovative product Abhaya First Wealth Pack was launched on 12.01.2012. Till 31st March 2012, 10260 Abhaya First Wealth packs with total amount of 37.27 Crore mobilized of which Premium is 17.97 Crore and Deposit with Bank is 19.30 Crore. Andhra Bank also introduced accepting taxes through net banking and ATM?s. Following migration of the Bank to CBS in March 2009, all of its customers can now transact from any branches across the country
doc_813633472.docx
It describes about Industry Trends of banking industry, PEST Analysis of banking Industry, Competitor Analysis, SWOT analysis, Company Description, General Information Andhra bank, it's Finance performance, SWOT analysis and Various Strategies employed.
Report on Andhra Bank- Industry and Company Analysis
Indian and Global Perspective The Indian banking sector has evolved into a robust banking system, emerging as one of the strong pillars of stability and growth in the Indian economy over the past decade. The growth of the sector has been largely facilitated by higher disposable income and savings in financial assets by Indian households. While the growth in the sector has been healthy, the penetration of the banking industry in India has been relatively low, mostly in the low income clustered regions such as rural and semi-urban areas. As emerging technologies and innovative channels continue to transform the banking industry, our role as stakeholders in transformation will be to anticipate and gear up the banking system for future opportunities and challenges. While under penetration will remain a key focus area of banks, a number of recent initiatives by RBI such as new licenses to private banks and savings rate deregulation is expected to increase competition in the industry. Thus, banks will have to address contrasting challenges of expanding their reach as well as rising competition in the coming decade for their share of the wallet. Similarly, there is contrasting set of challenges for banks related to customer information. Banks will have to create segregated strategies to service customers based on advanced business analytics. On the other hand, banks will have to increase their customer base among rural customers and SME?s for which information access is low. Creating interoperability across platforms and channels will emerge as another key challenge for banks. While innovation through channels such as mobile gain momentum in the coming years, interoperable systems will be needed to leverage technology through these channels where customers have savings account and mobile number portability. Government initiatives through the „Unique Identification Authority of India?(UIDAI) will provide impetus in improving financial access forth rural population while innovations through the payment system and effective business models will be critical in achieving financial inclusion goals. Financial inclusion and Infrastructure spending will emerge as the two key growth drivers for Indian banks in the coming decade.
Structure of Indian Banking Industry
Banks in India are classified into commercial banks (scheduled commercial banks or SCBs, and non-scheduled commercial banks) and co-operative credit institutions (that include various co-operative banks). The SCBs are further classified into public sector banks (PSBs),private banks, foreign banks and regional rural banks (RRBs). As can be seen in the charts above, although the RRBs and co-operative banks constitute 65% of the total number, they only cater to 5.6 %of the total business. As against this, SCBs (excluding RRBs i.e. SBI and its associates, nationalised banks, private banks and foreign banks) form only 35% of the total number but cater to around 94% of the total business of banks. This implies the domination and pivotal role of SCBs excluding RRBs in the Indian banking sector. Factors Shaping the future of Indian Banking Industry The Planning Commission of India in its Twelfth Five Year Plan (2012-2017) has envisaged a GDP growth of 9-9.5%. The Government?s thrust on infrastructure development along with private sector investment will be one of the key drivers for accelerating investment demand.
Financial Inclusion Financial Inclusion In India as compared to some major countries in 2010
India has been lagging behind major economies in achieving financial inclusion over the years. The extent of financial exclusion in low income dominated regions is even more staggering with only 30,000 habitation out of 600,000 habitations, having access to financial services. This means that almost 95% of the habitations (which are largely based in the rural and semi-urban region) have limited or no access to adequate financial services. Primary sectors as well as micro, small and medium enterprises (MSMEs) provide enormous potential to strengthen the domestic economy.
Enhancement and Inprovement In Payment System As per the Capgemini?s World Payment Report 2011, India is the eleventh largest non-cash payment market in the world. While majority of the volume of transactions currently are paper based, non-cash and electronic transactions are steadily gaining prominence. The market share of cards has increased from six to 19%. Payment system infrastructure have expanded steadily over the past few years with emergence of new payment system, growing acceptance of new delivery channels, increased number of ATMs (80,000+) and augmentation of payment processing infrastructure. The use of services provided by payment service facilitators such as intermediaries, technology solution providers and merchant acquirers gained ground in the industry during this period.
Emerging Trends in Indian Banking Technology Innovation will provide the edge. The banking system in India is set to undergo significant transformation in the coming years driven by financial inclusion, innovation in payment system and emergence of new channel such as mobile banking. Technology will emerge as the main differentiator as competition in the banking space increases. Banks will have to become increasingly agile to adopt as well as adapt to innovations in technology. As financial inclusion gains traction, banks will have to increasingly adopt branchless banking models owing to their low infrastructure cost as compared to running physical branches. A study by CGAP has identified four main business models to better understand the choices the industry faces in pursuit of viable models in
Conclusion The transformation in the Indian banking sector in the coming decade will be defined by the steps taken to achieve financial inclusion. Banks will focus on re-engineering their services as well as branches to gain strong foothold in low-income dominated regions such as rural areas and lower tier cities. The banking industry will also witness tremendous Innovations in the form of low-cost products and services, delivery channels and new technologies that will enable banks to make banking a viable business model in these regions. Payment systems are expected to largely migrate towards electronic platform as internet banking and mobile banking gain prominence in India. Nonetheless, the banking system will require robust infrastructure to implement emerging payment systems. Government initiatives towards building the Aadhaar Enabled Payment System is expected to boost the efforts of banks in achieving their financial inclusion goals. Besides financial inclusion, the banking sector will witness significant innovations in banking products and services catering to MSMEs, corporates and HNIs.
Introduction Andhra Bank is a medium-sized public sector bank (PSB), providing wide range of banking and financial services. It is engaged in providing retail banking, corporate banking, treasury and other banking services. The bank is a depository participant with Central Depository Service Limited (CDSL) and National Securities Depository Limited (NSDL).It has a network of 1,712 branches, 15 extension counters, 38 satellite offices and 1056 automated teller machines (ATMs) as on March 31, 2012. It has a total strength of 15099 staff members. History Andhra Bank was founded by the eminent freedom fighter, Dr. Bhogaraju Pattabhi Sitaramayya in 1923 in Machilipatnam, Andhra Pradesh. The Bank was registered on November 20, 1923 and commenced business on 28 November 1923 with a paid up capital of Rs 1.00 lakh and an authorised capital of Rs 10.00 lakhs. In 1956, linguistic division of States was promulgated and Hyderabad was made the capital of Andhra Pradesh. The registered office of the Bank was subsequently shifted to Andhra Bank Buildings, Sultan Bazar, Hyderabad, Andhra Pradesh. In the second phase of nationalization of commercial banks commenced in April 1980, the bank became a wholly owned Government bank. In 1964, the bank merged with Bharat Lakshmi Bank and further consolidated its position in Andhra Pradesh. Shareholding Pattern The Government of India owns 51.55% of its share capital and is going to increase it to 58% by infusing 1100 crore. The state owned Life Insurance Corporation of India holds 10% of the shares. Corporate bodies hold 2.2% and individual shareholders hold 9.98% of the shares. The bank has done a total business of Rs. 1,90,535 crore as on 31.03.2012. Top management The Bank?s Board is headed by the Chairman and Managing Director who is appointed by Central Government in consultation with Reserve Bank of India. Shri B A Prabhakar is the current Chairman and managing director. A whole time Director (Executive Director) of the bank appointed by Central Government in consultation with Reserve Bank Of India is also member of the Board. Sri A A Taj and Sri K K Mishra are the current executive directors. Products and Services The products and services provided by the bank are mainly categorized into businesses of Retail, Corporate, NRI, MSME, and Agricultural industries. Under the Retail Business, the bank offers Deposits, Loans, Cards, DMAT Services, Payment Services, Insurance, and Mutual Funds to individual customers. Under the Corporate Business, the bank offers Loans & Advances, Project Appraisal services, and Syndication of Loans to the business entities. Under the NRI business segment, the bank offers Deposit schemes, Loans, Remittance services, and Investment services to the Non Resident Indians. Under the MSME business
segment, the bank offers different schemes that aimed at providing loan and transaction services to Micro Small and Medium Enterprises (MSME). Some of the MSME schemes available are OTS Scheme, Composite loan scheme, Open cash credit (OCC), Artisans Credit Card (ACC), AB Laghu Udhyami Credit Card (LUCC), AB Power Tools (Shakti), Technology upgradation fund scheme (TUFs), Credit guarantee fund trust for small industries (CGTSI), AB Doctor Plus etc. Under the Agriculture business segment, bank provides different credit schemes to farmers, Women Empowerment schemes, and Andhra Bank Rural Development Trust (ABRDT) helps Rural Self Employment Training Institutes (RSETIs). Financial Performance The Bank continued to grow well showing a good performance during the Financial Year 2011-12. Profitability parameters saw satisfactory growth. Total Income increased by 32.8% from ` 9,188 Crore to 12,199 Crore while NonInterest Income (excluding Profit on Sale of Investments) stood at 739 Crore compared to 756 Crore in the previous year. Operating Profit of the Bank increased to 2,815 Crore from 2,413 Crore, registering an increase of 16.7%. NetProfit increased by 6.1% to 1,345 Crore in 2011-12 from 1,267 Crore in the previous year Total Business increased to 1,90,535 crore from 1,64,311 crore in 2010-11, registering a growth rate of 16.0%. Total Deposits increased to 1,05,851 crore from 92,156 crore in the previous year, registering a growth rate of 14.9%. CASA Deposits increased to 27,947 crore from 26,779 crore, registering a growth rate of 4.4%. Cost of Deposits stood at 7.51% Net Interest Margin stood at 3.67%. Non-Interest Income from Core Operations stood at 739 crore . Core Operating Profit (excluding Profit on sale of Investments) of the Bank increased to 2694 crore, recording a growth rate of 18.6%. Earnings per Share (EPS) stood at 24.03. Gross NPAs to Gross Advances Ratio stood at 2.12%. Net NPAs to Net Advances Ratio stood at 0.91% . Networth of the Bank increased to 7,480 crore from 6,493 crore. Average Business Per Employee increased to 11.5 crore from 9.59 crore Credit Deposit Ratio increased to 80.07% from 78.46%.
Peer comparision Company State bank of india Bank of Baroda Punjab Natl Bank Bank of India Canara Bank IDBI Bank Union Bank Indian Bank Allahabad Bank Oriental Bank iOB Andhra Bank Corporation Bank Syndicate Bank Central bank Strengths Andhra bank has taken many IT initiatives to improve customer service like Bank has launched e-Donations facility for donations to Shri Siddhivinayak Temple, Mumbai. Customer of any Bank having Mobile Banking Facility can donate funds by sending an SMS in a prescribed format to 8108114400 with MMID (Mobile Identification Number) 9011111. Bank introduced a new Loan Scheme for practicing Professionals named “AB Professional Loan” from 30.01.2012, to cater to the potential segment comprising of practising Chartered Accountants, Architects, Engineers, Valuers, Management & Financial Consultants, companySecretaries, Cost Accountants, etc. Bank recently launched a new Product named “Abhaya First Wealth Pack” in all its branches, combining features of four products, viz., Recurring Deposit, Savings Bank Account, Unit Linked Plan (Equity Option) and Life Insurance Cover. This is available in three denominations of Silver (` 25,000/-), Gold (` 50,000/-) and Platinum (` 1,00,000/-). Management of Non-Performing Assets has been the Core Strategy of the Bank. Gross NPAs could be contained at Rs.1798 crore, forming 2.12% of Gross Advances, while Net NPAs at ` 756 crore are lower at 0.91%. Total Branches increased from 1632 at the end of Financial Year 2010-11 to 1712 at the end of Financial Year 2011-12. Other delivery channels include 1056 ATMs,15 Extension Counters and 38 Satellite offices as on 31.03.2012. We also have 1127 Branchless Banking Units (Business Correspondents). Market Cap (Rs in Crore) 143,236.84 28,815.00 27,777.15 18,644.98 17,810.82 11,838.08 10,562.30 7,903.47 6,997.92 6,961.39 6,575.25 6,256.10 6,133.32 6,043.58 5,605.55 EV/EBIDTA 14.68 14.70 13.82 14.07 12.24 13.51 13.89 12.50 12.98 12.18 13.41 11.81 12.23 13.82 13.64
The Total Business (Total Deposits plus Gross Bank Credit) of the Bank registered a growth rate of 16.0%, up from 1,64,310 Crore as on 31.3.2011 to 1,90,535 Crore as on 31.3.2012. Weakness Limited advertising as compared to leading competitors like SBI. Small range of products in some sectors. Low market capitalisation as compared to its competitors. Oppurtunities Use of technology for value added services Andhra Bank, UK's Legal In Joint Venutre For New Life Insurance. The Reserve Bank injected durable primary liquidity of over Rs.2 trillion through open market operations (OMOs) purchase and a 125 basis point reduction in Cash ReserveRatio (CRR) to address the structural liquidity deficit. Despite the slowdown in domestic growth and the recent oil price increase, Indian equity markets stayed upbeat in Q4 of 2011-12 Increased capital outlays in the latest budget and brisk pace of tendering of road projects suggest some improvement in investment in latter part of 2012-13. The recent firming up of growth fundamentals in the US coupled with policy measures in the euro area have helped abate fears of a double dip recession in the advanced economies (AEs). Threats Global uncertainties and domestic cyclical and structural factors lowered the growth of Indian economy to below seven per cent in 2011-12 as compared to the growth rate of 8.4 per cent for 2010-11. The growth slowdown has been driven by a sharp fall in investment. Net capital inflows fell short of the current account deficit (CAD), resulting in a substantialdrawdown of Reserves. Energy prices are likely to remain a significant source of inflation ahead, as suppressed domestic prices of oil, coal and electricity prices are adjusted upwards. Growth in Aggregate Deposits in Banking sector has been lower than the corresponding period of the previous year Strategies
Retail Lending In order to consolidate and improve upon the quality of the portfolio, Bank had to put focused efforts on Recoveries. The major growth drivers were Housing Loans and Non-Agricultural Gold Loans. In the Fourth Quarter of the Financial Year 2011-12, interest rates on Housing Loans and Vehicle Loans were revised in line with market particularly to build up high end portfolio of above 20 lakhs. Attractive new products were launched in this Financial Year aiming at Doctors and other professionals like Chartered Accountants, Company Secretaries, Engineers, Architects, Management Consultants, etc. A Special Scheme “AB Swarna Loan” Scheme was launched to increase NonAgricultural Gold Loans. A Special Scheme was launched for financing Cars to Corporate Clients. Joint Venture/Tie ups Andhra bank is having Joint Venture in Insurance with Bank of Baroda and Legal and General Plc of UK christened “India First Life Insurance Co. Ltd”. The Bank?s stake in the venture is 30% while Bank of Baroda holds 44% and Legal and General Plc holds 26% stake. The Bank along with Bank of Baroda and Indian Overseas Bank, has entered into a tie up for setting up a Banking Subsidiary in Malaysia. With a view to be associated with one of the major commodity exchanges, Andhra Bank has a tie up with the Multi Commodity Exchange (MCX-SX) Ltd. Risk Management Risk Management in treasury operations has been strengthened further by undertaking stress testing and back testing of the investment portfolio at quarterly intervals. New Products Launched An innovative product Abhaya First Wealth Pack was launched on 12.01.2012. Till 31st March 2012, 10260 Abhaya First Wealth packs with total amount of 37.27 Crore mobilized of which Premium is 17.97 Crore and Deposit with Bank is 19.30 Crore. Andhra Bank also introduced accepting taxes through net banking and ATM?s. Following migration of the Bank to CBS in March 2009, all of its customers can now transact from any branches across the country
doc_813633472.docx