V. G. Mathew, Managing Director & CEO of the Bank addressed the call.

Highlights of the call:

For the quarter ended March 2018, Net interest income (NII) rose 12% to Rs 492.2 crore.

OP grew 11% to Rs 310.88 crore. Provision and contingencies fell 10% to Rs 148.63 crore after which PBT rose 40% to Rs 162.25 crore. As tax expenses grew 20% to Rs 48.15 crore, net profit too rose 51% to Rs 114.10 crore.

For FY 2018 South Indian Bank registered a 6% rise in Interest income to Rs 6192.81 crore. 1% rise in interest expenses at Rs 4227.29 crore saw net interest income (NII) rise 17% to Rs 1965.52 crore.

OP grew 22% to Rs 1480.78 crore. Provision and contingencies jumped 60% to Rs 980.90 crore after which PBT fell 17% to Rs 499.89 crore. Net profit fell 15% to Rs 334.89 crore.

The bank had returned to the normal trajectory of performance and growth during the last quarter.

The focus on retail, MSME and agriculture is consistently delivering improvement in the operating performance of the bank along with increase in share of other income and increase CASA.

The results are in line with guidance given earlier.

FY18 Advances grew around 17%.

Retail (excluding Gold), SME and Agriculture Loan book grew around 20%.

The bank saw around 23% YoY increase in transaction fee and technology income in FY18

The bank has zero accounts in its watch-list of large corporate loan book.

The focus is on retail loan products.

It believes that it has strategy & road map in place to increase CASA funds.

The bank will focus on increasing banking services for SME, Retail, NRI

CASA grew 9% to Rs 17142 crore. CASA stood at 23.80% against 23.82%.

Efforts are to shore up CASA number. Going forward focus will be to increase the share of CASA considerably.

Sold 3 NPS to ARC for 155 croe with 50% cash component.

Out of the total slippages 2 were from road projects. Total corporate slippage was Rs 482 crore out of this Rs 190 crore came in from standard assets.

Outstanding 5/25 is Rs 300 crore.

It identified certain irregularities in the nature of fraud at one of the branches and the loss is determined at Rs 25.02 crore (earlier Rs 28.50 crore).

On divergence in asset classification and provisioning for NPAs for 2016-17, the bank said the gap with respect to gross NPAs was Rs 8.39 crore. While for net NPAs, the divergence came in at negative Rs 15.13 crore.

Taking into account the divergence in provisioning of Rs 137.98 crore for the fiscal, the adjusted net profit for 2017 was reduced to Rs 293.91 crore from Rs 392.50 crore reported earlier.

Rs 600 crore gross slippages will be in FY 2019.

The bank has duly considered the impact of the divergences. .One account classified as NPA by the regulator stands upgraded to standard category upon regularisation of irregularity in that account.

CAR stands at 12.71%. desire is to have more relaxed capital adequacy position. If the company has to grow 20-25% it has to raise capital during FY 2019 depending the price it gets.

The provisioning coverage for bad loans and contingencies for the year was also higher at Rs 980.90 crore against Rs 614.37 crore.

Provision coverage ratio stands at 41.2%.

Restructured advances fell 48% to Rs 297 crore including NPA of Rs 240 crore.

The company is defocusing from stressed sectors and it has shifted its focus from large corporate to SMEs. It has set up a special cell for monitoring non performing and restructured assets.

The bank has appointed dedicated JGM to ensure focus and better coordination with regions.

It targets to become banker of choice to SMEs thereby getting other business as well –liabilities, vehicle finance, etc.

Around 16% of the Agriculture & SME Loans are backed by Additional Security by way of GOLD.

Rs 165 crore was ARC sale, cash recovery was Rs 29 crore, upgrades was Rs 53 crore and write off stood at Rs 162 crore.