Expect Andhra Bank`s performance to be stable: Brickwork

20805 Investors following Andhra Bank. Share this News with them.

0

Like this story, share it with millions of investors on M3

Expect Andhra Bank`s performance to be stable: Brickwork

Brickwork Ratings has reaffirmed "BWR AA+" for Andhra Bank’s upper tier II issue aggregating Rs 1000 crore and perpetual tier I issue of Rs 200 crore and ‘BWR AAA’ for Andhra Bank’s lower tier II issue of Rs 320 crore.

Post your opinion here

 

0

Tweet

Share on Tumblr

Andhra Bank BSE | NSE 31/05/12 Are Mutual Funds betting on Andhra Bank?

Brickwork Ratings has reaffirmed "BWR AA+" for Andhra Bank's upper tier II issue aggregating Rs 1000 crore and perpetual tier I issue of Rs 200 crore and 'BWR AAA' for Andhra Bank 's lower tier II issue of Rs 320 crore.

The rating "BWR AAA" stands for an instrument that is considered to have the HIGHEST degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. The rating "BWR AA+" stands for an instrument that is considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. A "Stable" rating outlook signifies the expectation of the rating being stable in the near term. The rating has been reaffirmed taking into account the financial performance of the bank, publicly available information and clarifications sought from the bank.

The rating reaffirmation for the various bond issues of Andhra Bank, inter alia, factors in the bank's strong earnings capability, improvement in profitability, comfortable capital adequacy levels, robust asset quality and the majority ownership by Government of India. Bank's ability to maintain its asset quality in light of recent pressures and achieve healthy growth in business are the key rating sensitivities.

The total business of Andhra Bank stood at Rs 1,68,929 Crore as of September 30, 2011, recording a y-o-y growth of 21.01% over Rs 1,39,604 Crore of total business as of September 30, 2010. Deposits at the end of H1FY12 stood at Rs 94,435 Crore as compared to Rs 78,584 Crore in H1FY11, registering a growth of 20.17% on y-o-y basis. Gross advances recorded a growth of 22.08% (y-o-y) reaching the level of Rs 74,493 Crore as on September 30, 2011 from Rs 61,020 Crore as on September 30, 2010. In FY11 the bank had registered a healthy growth of 22.44% in total business, 18.62% in deposits and 27.69% in gross advances. The bank displayed improvement in profitability, with the net profit for Q2FY12 improving by 4.29% to Rs 316 Crore as against Rs 303 Crore for Q2FY11. On half yearly front, the bank registered an expansion of 12.68% in net profits on y-o-y basis with the net profit reaching Rs 702 Crore as on September 30, 2011 (Rs 623 Crore as on September 30, 2010).

Gross NPA ratio as of Q2FY12 stood at 2.67% (Vs. 1.55 in Q1FY12 and 1.38% for FY11) and the net NPA ratio as of Q2FY12 stood at 1.48% (Vs. 0.45 in Q1FY12 and 0.38% for FY11). Andhra Bank reported a Capital Adequacy Ratio of 13.07% (Tier I - 8.77%) as on September 30, 2011. The provision coverage ratio (including technical write-offs) for the bank declined to 61.7% as on quarter ending September 30, 2011 from 83.94% for year ending March 31, 2011.

Overall, Brickwork Ratings expects the performance of the bank to be "Stable" over the next one year.

Disclaimer: Brickwork Ratings (BWR) has assigned the rating based on the information obtained from the issuer and other reliable sources, which are deemed to be accurate. BWR has taken considerable steps to avoid any data distortion; however, it does not examine the precision or completeness of the information obtained. And hence, the information in this report is presented "as is" without any express or implied warranty of any kind. BWR does not make any representation in respect to the truth or accuracy of any such information. The rating assigned by BWR should be treated as an opinion rather than a recommendation to buy, sell or hold the rated instrument and BWR shall not be liable for any losses incurred by users from any use of this report or its contents. BWR has the right to change, suspend or withdraw the ratings at any time for any reasons.

The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment