4QFY2012 Result Update | Banking

May 9, 2012

Andhra Bank
Performance Highlights

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

Source: Company, Angel Research

NEUTRAL
CMP Target Price
% chg (qoq) (7.1) (13.9) 12.0 4QFY11 862 712 313 % chg (yoy) 6.1 (7.1) 8.6

`110 -

4QFY12 914 661 340

3QFY12 984 768 303

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 6,133 1.0 148/79 71,318 10 16,480 4,975 ADBK.BO ANDB@IN

For 4QFY2012, Andhra Bank posted a moderate set of numbers with net profit increasing by 8.6% yoy (up 12.0% qoq) to `340cr, which were higher than our estimates due to lower effective tax rate than estimated by us. We recommend a Neutral rating on the stock. Asset-quality pressures moderate but still above normal levels: For FY2012, the banks business growth remained at moderate levels, with advances growing by 17.1% yoy (5.6% qoq during 4QFY2012) and deposits growing by 14.9% yoy (7.3% qoq during 4QFY2012). Current account deposit accretion picked up during 4QFY2012 with a growth of 15.1% qoq (down 11.0% yoy), while savings accounts growth was also reasonable healthy at 4.1% qoq up 10.0% yoy). The banks yield on advances declined by 43bp qoq on account of interest rate reversals amounting to `75-80cr. The banks cost of deposits also increased by 35bp qoq on account of sequential dip in CASA ratio and higher cost of borrowings on bulk deposits during the quarter. Consequently, the reported NIMs of the bank declined by 47bp during 4QFY2012. The banks asset quality improved during 4QFY2012, with gross and net NPA levels declining by 4.6% and 19.9% qoq. The banks provision coverage ratio also improved sequentially by 574bp to 71.1%. The slippage levels were higher on a qoq basis (slippage ratio of 2.6% compared to 2.1% in 3QFY2012), however continued momentum in recoveries (`551cr during 4QFY2012) led to lower gross NPA levels. Outlook and valuation: At the CMP, the stock is trading at 0.7x FY2014E ABV compared to its five-year range of 0.7x1.4x one-year forward ABV with a median of 1.1x. Considering the banks relatively higher risk exposures, particularly to the power sector (more than 16% of the loan book) and that peers of the bank are also trading at similar valuations with similar or better asset quality outlook, we remain 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 15.4 13.3 13.4

Abs. (%) Sensex Andhra Bank

3m (7.6) (5.1)

1yr (11.1) (22.1)

3yr 38.8 76.5

FY2011 3,221 46.8 1,267 21.2 3.3 22.6 4.8 0.9 1.3 23.2

FY2012E 3,759 16.7 1,345 6.1 3.3 24.0 4.6 0.8 1.1 19.2

FY2013E 4,245 12.9 1,256 -6.6 3.2 22.4 4.9 0.7 0.9 15.8

FY2014E 4,808 13.3 1,436 14.3 3.1 25.7 4.3 0.7 0.9 16.0

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

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

Sourabh Taparia
022 3935 7800 Ext: 6872 sourabh.taparia@angelbroking.com

Please refer to important disclosures at the end of this report

Andhra Bank | 4QFY2012 Result Update

Exhibit 1: 4QFY2012 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 writ.-off acc - Forex 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

4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy) 2,999 2,430 545 24 2,085 914 230 207 181 23 20 6 1,144 483 319 164 661 244 104 37 103 417 78 340 18.6 2,923 2,391 499 34 1,939 984 235 219 180 16 9 31 1,219 452 285 167 768 309 39 19 251 458 155 303 33.8 2.6 1.6 9.4 (30.1) NA 7.5 (7.1) (2.3) (5.6) 0.8 42.4 132.1 (81.5) (6.2) 6.9 11.9 (1.5) (13.9) (21.2) 163.9 93.5 (59.1) (8.9) (49.9) 12.0 (1523)bp 2,363 1,918 409 7 30 1,502 862 299 234 185 65 15 34 1,161 449 298 151 712 303 203 0 100 409 96 313 23.5 26.9 26.7 33.4 261.5 NA 38.8 6.1 (23.1) (11.6) (1.9) (64.5) 29.7 (83.2) (1.4) 7.5 7.0 8.5 (7.1) (19.5) (48.6) NA 3.0 2.1 (19.2) 8.6 (489)bp

Exhibit 2: 4QFY2012 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 914 230 1,144 483 661 244 417 78 340

Estimates 1,016 266 1,282 500 783 257 526 197 328

Var. (%) (10.1) (13.6) (10.8) (3.4) (15.5) (5.2) (20.6) (60.6) 3.4

May 9, 2012

Andhra Bank | 4QFY2012 Result Update

Exhibit 3: 4QFY2012 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

4QFY12 83,642 105,851 79.0 6,369 21,578 27,947 26.4 13.2 9.0 7.9 12.3 7.9 10.0 6.9 3.3 42.2 1,798 2.1 756 0.9 71.1 2.6 0.3

3QFY12 79,169 98,680 80.2 5,532 20,729 26,261 26.6 12.6 8.2 7.6 12.8 7.8 10.3 6.8 3.8 37.0 1,884 2.4 943 1.2 65.4 2.1 0.1

%chg (qoq) 5.6 7.3 (121)bp 15.1 4.1 6.4 (21)bp 60bp 79bp 35bp (43)bp 10bp (36)bp 8bp (47)bp 518bp (4.6) (26)bp (19.9) (30)bp 574bp 51bp 21bp

4QFY11 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 (yoy) 17.1 14.9 150bp (11.0) 10.0 4.4 (266)bp (120)bp (65)bp 146bp 73bp 49bp 75bp 107bp (35)bp 352bp 80.6 74bp 176.2 53bp (1281)bp 128bp (44)bp

NIMs decline on interest rate reversals

For FY2012, the banks business growth remained at moderate levels, with advances growing by 17.1% yoy (5.6% qoq during 4QFY2012) and deposits growing by 14.9% yoy (7.3% qoq during 4QFY2012). Current account deposit accretion picked up during 4QFY2012 with a growth of 15.1% qoq (down 11.0% yoy), while savings accounts growth was also reasonable healthy at 4.1% qoq up 10.0% yoy). However due to a relatively higher sequential increase in deposits, the CASA ratio marginally declined by 21bp during 4QFY2012. The bank plans to open ~200 branches in the northern and eastern part of the country during FY2013. We have factored in a loan growth of 14.5% in FY2013 and 16.0% in FY2014.

May 9, 2012

Andhra Bank | 4QFY2012 Result Update

Exhibit 4: Advances growth strong for 4QFY2012

15.0 10.0 5.0 Adv. qoq chg (%) 83.3 77.5 Dep. qoq chg (%) 80.2 CDR (%, RHS) 85.0 79.0 80.0 75.0

Exhibit 5: CASA ratio moderate for Andhra Bank

CASA ratio 30.0 29.0 28.0 27.0 26.0 17.1 14.5 12.1 CASA yoy growth (%, RHS) 20.0 15.0 10.0

77.9

8.9 12.3

6.0

3.9

7.6 4.5

5.6 7.3

70.0 65.0 60.0

29.1

27.8

26.1

26.6

(1.4)

(5.0)

(2.8)

25.0 24.0

26.4

3.4

4.4

5.0 -

4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Source: Company, Angel Research

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

Source: Company, Angel Research

The banks yield on advances declined by 43bp qoq on account of interest rate reversals amounting to `75-80cr. The banks cost of deposits also increased by 35bp qoq on account of sequential dip in CASA ratio and higher cost of borrowings on bulk deposits during the quarter. Consequently, the reported NIMs of the bank declined by 47bp during 4QFY2012.

Exhibit 6: YoA lower on interest reversals

13.20 12.80 12.40 12.00 11.60 11.20 10.80 10.40 10.00 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 11.60 12.23 12.45 12.76 12.33

Exhibit 7: NIM declines by 3.3%

4.00 3.80 3.60 3.40 3.20 3.00 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 3.34 3.69 3.77 3.82 3.81

Source: Company, Angel Research

Source: Company, Angel Research

Higher recoveries offset fresh slippages during 4QFY2012

The banks asset quality improved during 4QFY2012, with gross and net NPA levels declining by 4.6% and 19.9% qoq. The banks provision coverage ratio also improved sequentially by 574bp to 71.1%. The slippage levels were higher on a qoq basis (slippage ratio of 2.6% compared to 2.1% in 3QFY2012), however continued momentum in recoveries (`551cr during 4QFY2012) led to lower gross NPA levels. The banks restructuring book jumped by 62.0% qoq to `5,959cr (`2,280cr restructured during 4QFY2012) primarily on account of restructuring of SEBs (`1,200cr) and Air India (`600cr). The bank expects some amount of restructuring from construction related industries going ahead.

May 9, 2012

Andhra Bank | 4QFY2012 Result Update

Exhibit 8: NPA ratios above normal levels

3.0 2.5 2.0 1.5 1.0 Gross NPAs (%) 83.9 82.0 Net NPAs (%) PCR (%, RHS) 71.1 90.0 75.0 60.0 45.0 30.0

Exhibit 9: Trend in slippage ratios

Slippages (%) 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.4 0.1 0.3 0.8 0.8 Credit cost (%, RHS) 1.0 0.8 0.6 0.4 0.2 2QFY12 3QFY12 4QFY12

1.4 0.4

1.6 0.5

2.7 1.5

2.4 1.2

2.1 0.9

2.1

4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Source: Company, Angel Research

4QFY11

1.4

1QFY12

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

Exhibit 10: Cost-to-income ratio higher in 4QFY2012

Cost-to-income ratio (%) 44.0 42.0 40.0 38.0 1.6 1.6 1.6 1.7 Opex to average assets (%, RHS) 1.8 1.8 1.7 1.7 1.6 1.6 1.5 1.5 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
Source: Company, Angel Research

Exhibit 11: Opex trends

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

325

1.4

2.6
20.0 11.9 10.0 -

0.5

15.0

14.7

1.6

6.1

61.7

65.4

250

4.1 0.2

38.7

37.9

39.2

37.0

42.2

36.0 34.0

298

273

274

285

(8.3)

175 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Source: Company, Angel Research

319

(10.0)

Investment concerns
Moderate fee income; low CASA
During FY200712, fee income for the bank reported a CAGR of only 9.6% compared to advances posting a CAGR of 24.6%. Infact, the bank registered a negative growth in fee income during FY2012, which has led to proportion of fee income to overall assets declining from 0.8% in FY2011 to 0.6% as of FY2012. On the CASA front, the banks market share has fallen by 35bp over FY20051HFY2012; and at 26.4%, the banks CASA ratio is on the lower end compared to peers.

Risk-adjusted yields expected to fall

The bank has one of the highest yields in the industry (12.8% as of 3QFY2012 and 12.3% as of 4QFY2012 after accounting for interest reversals), also reflected in its relatively strong NIM of 3.3% (as of 4QFY2012). This can be partly attributed to the banks high concentration in the hinterland of its home state. That said, it is difficult for the bank to remain insulated from competition on the lending side and, as a result, we expect a decline in the banks risk-adjusted yields and overall profitability over the medium term.

May 9, 2012

Andhra Bank | 4QFY2012 Result Update

Outlook and valuation

The banks asset quality, which until 1QFY2012 was significantly better than its peers, deteriorated substantially during 2QFY2012 on account of switchover to system based NPA recognition. Although higher recoveries amounting to `1,034cr in 2HFY2012 have led to reduction in gross NPA levels (compared to 1HFY2012), the NPA ratios still remain significantly above the levels the bank used to enjoy till 1QFY2012. Also, relatively high risk exposures, particularly the power sector (more than 16% of the loan book), create risk of higher deterioration in asset quality for the bank in the coming quarters in our view. At the CMP, the stock is trading at 0.7x FY2014E ABV compared to its five-year range of 0.7x1.4x one-year forward ABV. Considering, the banks peers are also trading at comparable valuations with similar or better asset quality outlook, we remain Neutral on the stock.

May 9, 2012

Andhra Bank | 4QFY2012 Result Update

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 FY2013 14.5 18.0 25.7 3.3 4.3 15.0 15.0 3.4 67.0 FY2014 16.0 18.0 24.5 3.2 14.2 15.0 15.0 3.4 70.0

Revised estimates FY2013 14.5 18.0 24.8 3.2 5.4 15.0 15.0 2.5 70.0 FY2014 16.0 18.0 23.7 3.1 14.3 15.0 15.0 2.3 70.0

Exhibit 13: Change in estimates

FY2013 Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research

FY2014 Earlier estimates 4,931 1,067 5,998 2,408 3,590 1,351 2,238 726 1,512 Revised Var. (%) estimates 4,808 1,035 5,843 2,386 3,457 1,332 2,125 690 1,436 (2.5) (3.0) (2.6) (0.9) (3.7) (1.4) (5.1) (5.1) (5.1)

Earlier estimates 4,350 934 5,284 2,094 3,190 1,234 1,956 635 1,321

Revised Var. (%) estimates 4,245 906 5,151 2,075 3,076 1,217 1,859 603 1,256 (2.4) (3.0) (2.5) (0.9) (3.6) (1.4) (4.9) (4.9) (4.9)

Exhibit 14: P/ABV band

Price (`) 240 200 160 120 80 40 0
Dec-06 Apr-02 Jul-07 Aug-04 Apr-09 Mar-05 Aug-11 Mar-12 Oct-05 Feb-08 Nov-02 Sep-08 May-06 Nov-09 Oct-12 Jun-03 Jan-04 Jun-10 Jan-11

0.6x

0.8x

1x

1.2x

1.4x

Source: Company, Angel Research

May 9, 2012

Andhra Bank | 4QFY2012 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 Neutral Accumulate Buy Neutral Buy Accumulate Neutral Buy Buy Buy Buy Neutral Buy Buy Buy Buy Buy Accumulate Buy Buy Buy Buy Neutral Buy Buy Neutral CMP (`) 963 406 512 822 23 320 150 110 641 353 48 407 78 400 85 92 194 82 856 218 768 1,888 92 67 203 59 54 Tgt. price (`) 1,587 567 1,201 470 166 969 411 60 532 504 118 117 240 101 932 285 1,138 2,593 128 266 88 Upside (%) 64.8 10.6 46.2 46.7 10.8 51.1 16.3 24.0 30.7 25.9 39.2 27.3 23.7 23.1 8.9 31.0 48.1 37.4 40.3 31.2 48.4 FY2013E P/ABV (x) 1.3 1.0 2.9 1.3 1.1 1.6 0.6 0.7 0.7 0.7 0.6 0.7 0.7 0.5 0.5 0.5 0.7 0.5 0.8 0.5 0.7 1.2 0.5 0.7 0.7 0.4 0.6 FY2013E Tgt P/ABV (x) 2.2 3.3 1.9 2.4 0.7 1.1 1.0 0.7 0.9 0.7 0.7 0.7 0.8 0.6 0.8 0.6 1.1 1.6 0.8 0.9 0.7 FY2013E P/E (x) 6.9 7.1 14.4 10.1 6.1 7.7 3.6 4.3 4.3 4.4 3.6 4.3 3.9 3.6 3.3 3.8 4.0 3.8 4.4 3.4 4.3 7.0 3.3 4.7 4.1 2.7 4.4 FY11-12E EPS CAGR (%) 16.4 13.0 27.0 20.4 4.5 22.5 6.2 3.3 11.1 23.3 26.8 10.9 45.7 5.3 6.2 22.7 5.4 28.3 8.8 27.7 8.8 23.6 8.7 7.0 27.2 11.4 13.5 FY2013E RoA (%) 1.5 1.3 1.7 1.5 0.8 1.4 0.9 0.9 1.1 0.8 0.9 0.9 0.5 0.8 0.9 0.9 1.2 0.6 1.4 0.8 1.1 1.0 0.8 0.5 0.8 0.7 0.5 FY2013E RoE (%) 20.3 14.5 22.1 16.0 17.5 23.3 17.6 16.0 18.2 16.9 17.5 16.7 13.8 16.5 16.9 14.8 18.2 13.9 18.6 14.3 18.5 19.1 17.1 13.4 17.4 15.9 13.7

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

May 9, 2012

Andhra Bank | 4QFY2012 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 (%) 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 3,759 16.7 860 (4.1) 4,619 12.2 1,804 5.8 2,815 16.7 991 53.3 1,824 3.2 480 26.3 1,345 6.1 FY13E 4,245 12.9 906 5.4 5,151 11.5 2,075 15.0 3,076 9.3 1,217 22.8 1,859 1.9 603 32.4 1,256 (6.6) FY14E 4,808 13.3 1,035 14.3 5,843 13.4 2,386 15.0 3,457 12.4 1,332 9.5 2,125 14.3 690 32.4 1,436 14.3

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 (%) FY08 485 2,764 49,437 19.3 591 1,115 2,201 56,592 4,902 793 14,898 34,238 22.8 219 1,542 56,592 19.0 FY09 485 3,162 20.1 1,311 2,040 2,081 4,853 434 FY10 485 3,925 30.8 2,832 3,020 2,392 6,699 4,469 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 6,920 14.9 5,301 2,939 3,393 5,564 3,082 29,629 83,642 17.1 303 2,745 14.8 FY13E 560 7,851 18.0 6,226 3,366 3,858 4,996 3,619 FY14E 560 8,929 18.0 7,317 3,904 4,377 5,895 4,253

59,390 77,688

92,156 105,851 124,904 147,387

68,469 90,342 108,901 124,964 146,765 172,473

16,911 20,881 44,139 56,114 28.9 335 1,796 21.0 27.1 356 1,825 31.9

38,810 47,049 95,770 111,093 14.5 345 3,224 17.4 16.0 393 3,789 17.5

68,469 90,342 108,901 124,964 146,765 172,473

May 9, 2012

Andhra Bank | 4QFY2012 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 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 3.2 0.8 2.4 0.1 2.5 0.6 3.1 1.5 1.6 0.4 1.1 16.7 19.2 3.1 0.9 2.2 0.0 2.3 0.6 2.9 1.5 1.4 0.4 0.9 17.1 15.8 3.0 0.8 2.2 0.0 2.2 0.6 2.8 1.5 1.3 0.4 0.9 17.8 16.0 9.2 1.6 3.6 8.1 1.5 4.1 5.1 1.2 4.6 4.8 0.9 5.0 4.6 0.8 5.0 4.9 0.7 4.6 4.3 0.7 5.0 11.9 67.0 4.0 13.5 75.2 4.5 21.6 90.9 5.0 22.6 116.0 5.5 24.0 131.8 5.5 22.4 146.9 5.0 25.7 164.9 5.5 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 91.6 1.4 0.4 1.4 0.5 83.9 2.1 0.9 3.0 0.4 71.1 3.2 1.2 2.5 0.6 70.0 3.9 1.4 2.3 0.6 70.0 33.6 69.3 11.6 8.5 31.4 74.3 13.2 8.7 29.4 72.2 13.9 8.2 29.1 77.5 14.4 9.7 26.4 79.0 13.9 9.7 24.8 76.7 13.3 9.3 23.7 75.4 12.9 8.9 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 3.3 39.1 1.1 19.2 3.2 40.3 0.9 15.8 3.1 40.8 0.9 16.0 FY08 FY09 FY10 FY11 FY12E FY13E FY14E

May 9, 2012

10

Andhra Bank | 4QFY2012 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%)

May 9, 2012

11