South Indian Bank's Q2 net up 24.4% on robust biz, lower NPAs

Oct 17, 2011 I Business Line I Kochi

For Kerala-headquartered South Indian Bank, the quarter-ended September 2011 proved to be a landmark period in more ways than one. The bank's net profit almost touched the Rs 950M (19.6M) mark for the first time in its history, said SIB's Chief Executive and Managing Director, Dr V. A. Joseph.

Besides achieving 24.4 per cent growth in net profit to reach Rs 949.5M ($19.6M) during the just-ended quarter compared with Rs 763.0M ($15.7M) in the corresponding quarter of the previous fiscal, the bank has also managed to keep its gross and net NPAs (non-performing assets) below the one per cent mark. ‘We've managed this at a time when most banks expect their NPAs to surge as compared to the earlier quarter,” the Chief Executive added. The bank's gross NPA fell to 0.99 per cent (1.27 per cent) and net NPA, to 0.25 per cent (0.38 per cent).

During the second quarter, deposits grew at 32 per cent to Rs 330.4B ($6.8B) and advances at 30 per cent to Rs 233.5B ($4.8B). The total business of the bank increased to Rs 563.9B ($11.6B), up 30.8 per cent and by Rs 132.9B ($2.7B) year-on-year. The CASA increased by Rs 10.6B ($218.6M) from Rs 59.8B ($1.2B) to Rs 70.4B ($1.4B), up 18 per cent. “Robust growth in business coupled with low NPA has enabled SIB to achieve the present numbers, targets,” Dr Joseph reiterated.

The bank has maintained the Net Interest Margin (NIM) at 3 per cent, and improved the provision coverage from 71 per cent a year ago to 74.7 per cent at the end of the Q2 of 2011-12. The CAR (capital adequacy ratio) is at 13.48 per cent.

Though CAR is higher than the regulatory requirement, it has declined from 15.86 per cent registered at the end of the second quarter of the earlier fiscal. “We are not looking to raise tier II capital immediately. We can manage without it this fiscal,” Dr Joseph said in reply to a query. The bank is looking to increase its branch network to 700, and ATMs to 600 by the end of the current fiscal. It is targeting Rs 750B ($15.4B) business by the end of the next fiscal.

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