Performance / Financial Highlights March 2007

Brief Profile Established on Nov 20th 1923 by the Veteran Freedom Fighter and a multi-faceted genius – Dr Bhogaraju Pattabhi Seetaramaiah Nationalized on 15th April 1980 Total Business Delivery Channels – 1930 Sponsored Two Regional Rural Banks Dividend Declared –24%, 28%, 30%,35% and 38% during the last five years.

Performance Highlights for March 2007 Total Business Rs. 69,687 Crores. Continues to maintain very Low NPA levels – Gross NPAs @ 1.41% & Net NPAs @ 0.17%. Net Profit increased by 10.79% on Y on Y basis. CRAR stands at 11.33%

Branch Network As on Rural Semi Urban Urban Metro Total 31.03.04 381 317 277 153 1128 31.03.05 385 329 294 160 1168 31.03.06 389 345 314 165 1213 31.03.07 396 372 342 179 1289 Bank has presence in 22 States and 2 Union Territories

Business Levels Details- 31.03.2006 % Growth Deposits Advances (GBC) (Rs in crores) Details- 31.03.2006 % Growth Deposits Advances (GBC) Investments (Net) C / D Ratio(%) Net Interest Income Operating Profit Core Operating Profit (excluding Profit on sale of Investments) Net Profit Net NPAs % of Net NPAs to Net Advances 31.03.2007 33922 41454 22.20 22484 28233 25.57 11444 14301 24.97 66.69 68.28 1.59 1169 1418 21.30 703 931 32.43 632 951 50.47 486 538 10.79 47 -9.13 52 0.24 0.17 -0.07

Deposits - Composition (Rs in crores) Type of Deposit 31.3.04 31.03.05 31.03.06 31.03.07 Current Deposits 2218.94 2558.29 3084.82 3661.85 - Percentage Share 9.67% 9.29% 9.09% 8.83% Savings Deposits 6348.12 7400.77 9232.39 10651.70 27.67% 26.86% 27.22% 25.70% Term Deposits 14373.44 17591.65 21605.20 27140.47 62.66% 63.85% 63.69% 65.47% T O T A L: 22940.52 27550.71 33922.41 41454.02

Deposits - Average (Rs in crores) Type of Deposit 31.03.2004 31.03.2005 31.03.2006 31.03.2007 Average Current Deposits 1317.13 1778.83 2219.71 2466.72 Savings Deposits 5262.42 6712.14 8087.18 9751.96 Term Deposits 14415.58 14706.07 18258.93 21801.41 T O T A L: 20995.13 23197.04 28565.82 34020.09

Advances - Major Sector-Wise Exposure (Rs in crores) SECTOR 31.03.04 31.03.05 31.03.06 31.03.07 Food Credit 700 800 751 898 Non-food Credit 12684 17110 21733 27336 Growth in Non Food Credit 15.94% 34.89% 27.02% 25.78% - Medium & Large Industries 3511 4958 6412 9048 - Priority Sector 5144 7331 8627 11427 - Other Sectors 4029 4821 6694 7759 Gross Bank Credit 13384 17910 22484 28234 % GROWTH IN GBC 12.48% 33.82% 25.24% 25.59%

Retail Credit (Rs in crores) Category 31.03.04 31.03.05 31.03.06 31.03.07 Housing Loans (Direct) 1031 1263 1572 1774 Housing Loans (Indirect) 213 615 864 2204 Educational Loans 396 513 677 904 Other Retail Credit 1057 1324 1934 1739 Total 2697 3715 5047 6621

Quality of Loan Assets Asset Quality 31.03.04 31.03.05 31.03.06 31.03.07 Standard Assets 95.40% 97.48% 98.06% 98.59% Sub-Standard Assets 1.55% 0.75% 0.51% 0.79% Doubtful Assets 3.01% 1.73% 1.30% 0.54% Loss Assets 0.04% 0.13% 0.08% T O T A L 100.00%

Gross NPAs to Gross Advances Net NPAs to Net Advances Non-performing Assets – Year Wise Movement in Five Years As on Gross NPAs to Gross Advances Net NPAs to Net Advances Rs. Crore % Rs. Crore 31.03.2004 615.37 4.60 120.07 0.93 31.03.2005 440.93 2.46 48.97 0.28 31.03.2006 436.91 1.94 52.46 0.24 31.03.2007 397.01 1.41 47.25 0.17

Provision Coverage for NPAs & Slippage Ratios As on Provision Coverage % Slippage Ratio % 31.03.2004 80.16 2.61 31.03.2005 88.22 1.18 31.03.2006 87.20 0.88 31.03.2007 86.52 1.11

NPA Movement PARAMETER 31.03.04 31.03.05 31.03.06 31.03.07 (Rs in crores) PARAMETER 31.03.04 31.03.05 31.03.06 31.03.07 Gross NPAs at the beginning of the period 580.70 615.37 440.93 436.91 Less: Reduction during the period 259.89 324.68 157.28 283.56 NPAs after reduction 320.81 290.69 283.65 153.35 Add: Additions during the period 294.56 150.24 153.26 243.66 Gross NPAs at the end of the period 397.01 Net NPAs at the end of the period 120.07 48.97 52.46 47.25

Investments Particulars 31.03.2004 31.03.2005 31.03.2006 31.03.2007 (Rs in crores) Particulars 31.03.2004 31.03.2005 31.03.2006 31.03.2007 Total (Net) Investments 10317.35 10646.28 11444.15 14300.72 Average Investments 10660.00 10112.08 10846.97 12295.34 Profit on Sale of Investments 401.76 385.51 70.84 53.71 Yield on Investments 8.92% 8.14% 7.29% 7.34%

Investments - Composition (Rs in crores) Type of Investments 31.03.04 31.03.05 31.03.06 31.03.07 Government Securities 8810.14 8777.55 9749.29 11357.02 Other Approved Securities 212.52 152.99 153.14 148.54 Shares 89.02 243.64 133.98 216.28 Debentures and Bonds 956.25 1168.31 924.71 947.49 Subsidiaries and/ or Joint Ventures 9.31 Others (IDBI Deposits, IVPs, Units of UTI &Mutual Funds and RIDF 240.11 294.48 473.74 1622.08 Total Investments 10317.35 10646.28 11444.15 14300.72

Quality of Investments Portfolio Duration of Investment portfolio as on 31.03.2007 is 4.92 years. (4.65 years as on 31.03.2006) Duration of AFS portfolio as on 31.03.07 is 2.31 years (2.03 yrs as on 31.03.2006) NPAs in Investment Portfolio – Rs. 0.47 lakhs –100% provided (Rs.1.31 lakhs as on 31.03.2006)

Profit & Loss Account - Spread Management (Rs in crores) Particulars FY 2004 2005 2006 2007 Interest Income 2227.26 2273.46 2674.37 3315.33 Interest Expenses 1316.68 1204.42 1505.39 1897.79 Interest Spread (NII) 910.58 1069.04 1168.98 1417.54 Net Interest Margin 3.78% 3.58% 3.32% 3.20%

Interest Income Particulars FY 2004 FY 2005 FY 2006 FY 2007 Advances (Rs in crores) Particulars FY 2004 FY 2005 FY 2006 FY 2007 Advances 1230.82 1358.60 1763.37 2303.40 Investment 951.16 823.27 790.60 896.43 Others 45.28 91.59 120.40 115.50 T O T A L 2227.26 2273.46 2674.37 3315.33

Interest Expenses Particulars FY 2004 2005 2006 2007 (Rs in crores) Particulars FY 2004 2005 2006 2007 Interest on Deposits 1238.93 1129.42 1388.62 1810.78 Interest on Sub-ordinate Debt 45.78 49.33 60.32 46.80 Interest on Borrowings 31.98 25.67 56.45 40.21 T O T A L 1316.69 1204.42 1505.39 1897.79

Profit & Loss Account – Non-interest Income (Rs in crores) A) Non-interest Income from Core Operations FY 2004 2005 2006 2007 1. Commission & Exchange 115.91 139.04 169.71 181.56 2) Dividend Income 14.76 9.94 8.42 5.95 3) Forex Profit 20.06 28.45 27.71 32.27 4) Other Income 125.55 190.41 114.87 173.40 Sub Total 276.28 367.84 320.71 393.18 B) Profit on Sale of Investment 401.76 385.51 70.84 53.71 Total Non Interest Income 678.04 753.35 391.55 446.89

Non-Interest Expenditure (Rs in crores) Particular FY 2004 2005 2006 2007 Variance over 2006 Establishment Expenses 409.41 539.53 492.89 548.80 11.34% Other Operating Expenses 249.05 289.93 365.05 384.39 5.30% T O T A L: 658.46 829.46 857.94 933.19 8.77%

Provisions & Contingencies (Rs in crores) Particulars FY 2004 FY 2005 FY 2006 FY 2007 Income Tax 224.09 222.77 80.00 247.00 Dep./Loss on revaluation of Investments -7.41 166.52 65.29 62.82 Provision for NPAs 242.53 12.40 40.00 38.57 Provision against Standard Assets 3.50 13.29 39.87 46.00 Amortization 3.96 66.47 0.00 0.00* Others -8.62 - 8.07 -1.05 Total 466.67 472.83 217.09 393.34 * For 2006-07 amortization expenses amounting to Rs.73.58 crores are deducted from the other income as per RBI guidelines. Similar effect is carried for 2006 for the sake of comparison.

Net Profit Particulars FY 2004 2005 2006 2007 Operating Profit 930.17 (Rs in crores) Particulars FY 2004 2005 2006 2007 Operating Profit 930.17 992.93 702.59 931.24 Core Operating Profit (excl. Profit from sale of Investments) 528.40 607.42 631.75 877.53 Provisions 466.67 472.83 217.09 393.34 Net Profit 463.50 520.10 485.50 537.90

% OF TIER-I TO TOTAL CAPITAL Capital Structure (Rs in crores) YEAR TOTAL CAPITAL TIER-I CAPITAL TIER-II CAPITAL % OF TIER-I TO TOTAL CAPITAL 31.03.2004 1778.00 1059.00 719.00 59.56% 31.03.2005 2291.64 1519.00 772.64 66.28% 31.03.2006 3295.71 2872.19 423.52 87.15% 31.03.2007 3565.41 3141.43 423.97 88.11%

Financial / Performance Key Ratios and Indicators at a Glance FY 2004 FY 2005 2006 2007 Cost of Deposits 5.87 4.86 5.32 Yield on Advances 10.52 9.43 9.26 9.88 Yield on Investments 8.92 8.14 7.29 7.34 Contd…

Financial / Performance Key Ratios and Indicators at a Glance Ratios FY 2004 2005 2006 2007 Non Interest Income to Average Working Funds 2.70 2.67 1.30 1.09 Cost of funds 5.24 4.27 4.28 4.63 Yield on funds 8.86 8.06 7.60 8.08 Net yield 3.62 3.79 3.32 3.45 Contd…

Financial / Performance Key Ratios and Indicators at a Glance Ratios FY 2004 FY 2005 FY 2006 FY 2007 Cost to Income Ratio 41.45 45.51 52.73 50.05 Staff Cost as % of AWF 1.63 1.91 1.40 1.34 Other Operating Expenses as % of AWF 0.99 1.03 1.04 0.94 Contd…

Earnings Ratios FY 2004 FY 2005 2006 2007 Return on Avg. Assets (ROAA) % 1.84 1.38 1.31 Return on Net Worth (RONW) % 35.91 28.31 16.78 17.78 Earnings Per Share (Amount in rupees) (On annualized basis) 11.59 13.00 11.78 11.09 Book Value Per Share (Amount in rupees) 36.65 45.93 59.67 65.08 Contd…

Productivity Ratios FY 2004 2005 2006 2007 Business Per Employee (Rs in Lakhs) FY 2004 2005 2006 2007 Business Per Employee 250.30 346.25 426.75 536.06 Gross Profit Per Branch 81.80 85.01 63.41 72.69 Net Profit Per Employee 3.50 3.97 3.69 4.14 Business Per Branch 3213.00 3885.87 4633.02 5406.51 Contd…

Capital Adequacy / Other Ratios As on 31.03.04 31.03.05 31.03.06 31.03.07 Tier I Capital Ratio 8.17% 8.03% 12.20% 9.98% Tier II Capital Ratio 5.54% 4.08% 1.80% 1.35% Total Capital Ratio (CRAR) 13.71% 12.11% 14.00% 11.33% Net Worth to GBC % 11.27% 10.26% 12.87% 11.18% Net NPAs to Net worth % 8.27% 2.67% 1.81% 1.50% Net NPAs to Net Advances % 0.93% 0.28% 0.24% 0.17% Contd…

Additional Disclosures Break up of Investments (Rs in crores) Nature of Investments As on 31.03.2005 As on 31.03.2006 As on 31.03.2007 Amt. % of Total SLR Securities 8398 78.88 9370 81.88 11450 78.52 Non-SLR Securities 1758 16.51 1584 13.84 2901 19.89 Recapitaliza-tion Bonds 490 4.61 4.28 232 1.59 Total 10646 100 11444 14583 Contd… SLR maintained as on 31.03.2007 – 26.93 % of NDTL

Additional Disclosures CRAR as per extant guidelines of RBI including capital charge for Market Risk stands at 11.33% as on 31.03.2007 as against 14.00% as on 31.03.2006. If capital charge for Operational Risk, is also factored, the CRAR would stand at 10.36%. (RWAs for Operational Risk as on 31.03.2007 are reckoned for this purpose) Contd…

Business Delivery Channels / Service Outlets FY 2004 2005 2006 2007 Branches 1128 1168 1213 1289 Extension Counters 129 136 123 99 ATMs 272 330 391 505 Satellite Offices 44 38 37 TOTAL 1573 1672 1764 1930

Clerical Staff to Officer Ratio Intellectual Capital As on OFFICERS CLERICAL STAFF SUB-STAFF TOTAL Clerical Staff to Officer Ratio 31-03-04 7753 3124 2218 13095 0.40 31-03-05 7989 2885 2233 13107 0.36 31-03-06 8072 2827 2270 13169 0.35 31-03-07 8021 2675 2285 12981 0.33

Technology Initiatives / Value Added Services 100% Branch Computerization achieved by 31.03.2003. ATMs increased from 391 as on 31.03.2006 to 505 as on 31.03.2007. Branches/ECs connected to ATMs increased from 917 as on 31.03.2006 to 1059 as on 31.03.2007 No. of ATM/Debit cards increased from 1.83 million as on 31.03.2006 to 2.34 million as on 31.03.2007. Total shared ATM net work with IDBI Bank, UTI Bank, Indian Bank, HDFC Bank, SBI group and others stand at 17500 Contd…

Technology Initiatives/Value Added Services Contd Technology Initiatives/Value Added Services Contd., Cash Management Services commenced in 2004 - the following is the growth Details 2004-05 2005-06 2006-07 No of Branches 56 123 128 No of Customers 65 86 113 Total Turnover Rs.818 Crs Rs.1147 Crs Rs.1523 Crs

Technology Initiatives/Value Added Services Contd Technology Initiatives/Value Added Services Contd., Cluster based Core Banking Total Business Units covered 1104 Of which - Branches 1006 Extension Counters 83 Service Centers 15 % of Branch network covered 78.50% % of Business covered 93.50%

Technology Initiatives/Value Added Services Average ATM hits 1.36 lakhs per day. Mobile Recharging facility. e-r@il facility to book railway tickets in the internet Infi-net, the Internet Banking Facility Quikticket: Facility to book Kingfisher Airlines tickets through ATMs of the Bank. Internet Payment Gateway Tech savvy products such as e-Seva, e-Hundi, Utility Bill Payment, Visa Electron Debit Card, Instant Funds Transfer, On-line Tax Accounting System, RTGS, ABB, Shared Clearing, E-BA1 etc. Various Insurance Linked Deposit products like AB Jeevan Prakash, AB Jeevan Prakash Plus, AB Arogyadaan and AB Flex. New Tech savvy product AB Kisan Vikas ATM Card has been introduced.

Value Added Services Internet Payment Gateway FIRST BANK IN INDIA TO START BIOMETRICS ATM Introduced 8 a.m. to 8 p.m. and 7 day Banking in select branches to extend the Service hours to clientele. Imparting training to Agriculturists, Rural Unemployed youth on vocational courses through our 9 Rural Development Institutes. Contd…

AWARDS & REWARDS Best Bank Award for use of IT for customer service in semi-urban and rural areas from IDRBT Merit Award for “Banking Sector subject to prudential supervision” from SAFA (South Asian Federation of Accountants) amongst all South Asian Banks for the quality of the balance sheet. “Fintech Asia 2006” Award for “Any Branch Banking” Initiatives. Rated second best bank under category of Asset Quality in Business Today KPMG Survey of Best Banks 2006. Joint Runner-up Award in the Best Payments initiative for promoting ATM Channel by IBA & TFCI.

HIGHLIGHTS DURING THE YEAR Andhra Bank has hosted the Bankers’ Conference “BANCON-2006” in collaboration with the Indian Banks’ Association at Hyderabad. First Bank in India to introduce ATM with Biometric Access and audio guidance for the benefit of rural areas and illiterate customers. Mobile ATM facility provided at Kottayam for the benefit of Sabarimalai pilgrims. Internet Banking introduced. Special Facility to book Kingfisher Air tickets through the ATMs introduced. AB Kisan Vikas ATM Card introduced for the benefit of agricultural community. Facility to book train tickets through internet introduced. Opening of representative offices is under consideration – Riyadh, Kuwait & New Jersey. Preparations are underway for a joint venture in Banking operations in Malaysia with Bank of Baroda and Punjab National Bank as partners.

FIRST BIO METRIC MOBILE ATM IN INDIA

Results that define pursuit of Excellence are due to: Support from Customers, Stake-holders and Well Wishers, Team work of 13000 dedicated employees AND Excellent co-operation from Banking Analysts.

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