Andhra Bank, a Public sector bank of mid size has most of its operations in Andhra Pradesh alone. Nearly two third of its 1546 branches are in Andhra Pradesh itself.

The bank has made a mark in the banking sector for having very low Non Performing Assets (NPAs). Over the last five fiscal years, the bank has recorded NPA accounting to only 0.2 % of the total advances.

NPA is a reflection of the performance of a bank. And Andhra Bank has proved to have such low NPA levels that it rates amongst the best in asset quality. The bank has shown to increase its loan book at rate higher than the industry rates. The loan book of the bank has grown at a rate of 28 % in the time range from FY 05- FY 09.

The second quarter results of the bank in December 2009 have reported growth in advances at 22 % which is double the industry rates. The credit deposit ratio of the bank stood at a staggering 77.5% which happens to be amongst the highest in the industry.

This proves the bank's effectiveness in a time when the industry is struggling with falling credit growth. The bank has managed to maintain its growth above the industry average when its counterparts are struggling to reach the mark due to economic downfall.

In the first six months of the current fiscal, fall in interest rates enabled banks to earn treasury gains as bond prices shot up. But due to rising inflation the interest rates again shot up leaving banks in woe. Also banks found it difficult to lend to corporate sector as credit growth slipped to a strikingly low level.

But even in such times of distress, Andhra Bank managed to record 30 % rise in profits. The growth in profit was streamlined by the 29% growth in net interest income (NII) and some moderation in expenses. Net interest income refers to the difference between the net interest earned and the net interest expenditure. The bank has maintained an average net interest margin (NIM) of around 3.5 % over the last five fiscals.

Also the banks provision coverage ratio stood at 90% at the end of December 2009 quarter thus implying that the bank ahs sufficient coverage against bad debts.