Andhra Bank declined on Friday on selling pressure.

By 10:07 IST, the scrip of the state-run bank was down by 0.62% to Rs 32.20 on the BSE, off its high of Rs 32.90 but recovering from a low of Rs 31.80. Over 430,000 shares changed hands on the counter.

In the last three sessions, the scrip lost 7% from its 52-week high of Rs 34.60 on 6 May 2003. Earlier, it witnessed a one-way upward movement following sustained buying support, especially from foreign institutional investors. In the last one year, the scrip rose by 250% from its 52-week low of Rs 9.90 on 21 May 2002.

Analysts said the fall on the Andhra Bank counter was due to profit-booking, after a sustained rise ahead of its results. But they feel that the scrip may recover after a correction. Analysts don't expect the stock to see any major downward movement from the current levels.

On Thursday, Andhra Bank announced its fourth quarter as well as full year results for the period ended 31 March 2003.

For Q4, it recorded a massive 100% rise in its net profit to Rs 140.59 crore (Rs 1.4 billion) on a 28.6% increase in total income to Rs 788.72 crore (Rs 7.88 billion).

For the full year ended 31 March 2003, the bank's net profit rose by 99% to Rs 402.99 crore (Rs 4.02 billion) on a 20% rise in total income to Rs 2,798.66 crore (Rs 27.98 billion).

On a consolidated basis, for the year ended 31 March 2003, the bank's net profit was at Rs 382.70 crore (Rs 3.82 billion) on total income of Rs 2,800.93 crore (Rs 28 billion). The consolidated financial accounts includes that of subsidiary, namely Andhra Bank Housing Finance.

Meanwhile the bank's board declared a dividend of 24% for FY 2002-03.

Andhra Bank's business continues to grow at an impressive rate, with total business mix going up by 16% to Rs 32,961 crore (Rs 329.61 billion) as on March 2003. Total deposits grew by 14% to Rs 21,062 crore (Rs 210.62 billion). Low-cost deposits constituted 30.5% as compared to 28.3% in the previous year. Average cost of deposits declined from 8.2% to 7.1% as on March 2002. Gross bank credit increased by 19% to Rs 11,899 crore (Rs 118.99 billion). Yield on advances stood at 11.6%, compared to 12% as on March 2002. The credit-deposit ratio improved from 54.5% to 56.8% as on March 2003.

The Capital Adequacy Ratio stood higher at 13.6% as against 12.6% as on March 2002. The minimum CAR requirement as per Reserve Bank of India is 9%. Also the net worth of the bank increased by 26% to Rs 1,115.43 crore (Rs 11.15 billion) after taking into consideration a return of part of capital of Rs 50 crore to Government of India. The paid-up capital of the bank after the return of capital to GoI stood at Rs 400 crore (Rs 4 billion) as on March 2003.

Gross non-performing assets, as on March 2003, stood at Rs 580.70 crore (Rs 5.8 billion) as against Rs 524.14 crore (Rs 5.24 billion) as on March 2002. The gross NPAs to gross advances ratio decreased to 4.9% from 5.3% as on March 2002. Net NPAs, as on March 2003, stood at Rs 206.27 crore (Rs 2.06 billion) as against Rs 237.23 crore (Rs 2.37 billion) as on March 2002. The ratio of net NPAs to net advances declined to 1.8% from 2.5% as on March 2002.

Meanwhile for the current financial year ending 31 March 2004, Andhra Bank plans to reduce NPAs to Rs 426 crore (Rs 4.26 billion) from the present level of Rs 580.70 crore (Rs 5.8 billion). It also plans to enlarge the customer base to 12 million as well as achieve a total business of Rs 40,750 crore (Rs 407.5 billion) by the end of FY 2003-04.

Of late, banking sector stocks have become the favourites of institutions following the enactment the Securitisation Act. The Act allows banks to seize defaulters' assets and hasten recovery of loans without additional court procedures. It also paves the way for setting up of asset reconstruction companies by banks.

Analysts said the Andhra Bank stock is one of the best picks in the sector following the bank's strong fundamentals.

Meanwhile, as on 31 March 2003, the GoI holding in Andhra Bank was at 62.5%, while public, institutions and foreign institutions held 27.15%, 4.95% and 1.27% respectively.