Like several other banks in India, sectors such as infrastructure, power and steel had been the cause of concern for Andhra Bank leading to several bad loans (non-performing assets) in the past. Andhra Bank will not look at infrastructure and power for some time.

The bank will focus on food processing, retail and textiles, instead. SME sector and retail credit will be tapped in a big way. In the coal sector, the bank has supported existing clients already but new coal clients will not tapped. Existing coal clients with good track record will be supported in future as well. The bank will also keep some distance from the mining sector, a source said.

Most of the infrastructure contractors are trying to come out of restructuring by repaying loans as they strive to get further lending support by the bank. This is a good sign as these contractors otherwise are not getting any support from other banks.

The bank witnessed a decline in gross NPA at 5.31 per cent at `6,876.54 crore during the last fiscal while the net NPA came down at 2.93 per cent at 3,688.63 crore. However, during the FY 2014-15, the bank could recover `2,405 crore as compared to `689 crore recovered during the FY 2013-14.

The net addition of NPA during the last fiscal could be limited by the bank due to high recovery obtained through restructuring of NPA accounts. The bad loan accounts in agriculture are kept under check and such accounts will not receive any further lending. The bank has also made surplus provisioning for NPAs.

The bank’s business grew by 12. 7 per cent from `2,52,494 crore to `2,84, 588 crore during the last fiscal. MSME advances went up by 21.7 per cent, from `18,238 crore to `22,200 crore while the bank's priority sector advances increased from `41,920 crore to `45,508 crore reflecting a 8.6 per cent growth. However agriculture sector saw a decline by 1.9 per cent.