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

Highlights of the call:

South Indian Bank registered a 10% rise in Interest income to Rs 1696.51 crore in the quarter ended September 2018.

15% rise in interest expenses to Rs 1190.04 crore saw net interest income (NII) rise 1% to Rs 506.47 crore.

PBT rose from Rs 6.59 crore Rs 105.10 crore and net profit rose from Rs 4.32 crore to Rs 70.13 crore.

Other income fell 44% to Rs 157.89 crore Fall in other income is due to reduction in trading profits from treasury books.

For the six months ended September 2018 South Indian Bank registered an 11% rise in Interest income to Rs 3350.42 crore. 13% rise in interest expenses to Rs 2349.70 crore saw net interest income (NII) rise 4% to Rs 1000.72 crore.

PBT fell 11% to Rs 143.21 crore. Net profit fell 12% to Rs 93.17 crore.

Advances increased by Rs 7,696 crore to Rs 57,413 crore, registering a credit growth of 15.48%. Growth drivers continue to be retail, agriculture and MSME sectors.

Core deposits grew 8.7% to Rs 60887 crore.

Non-Core deposits grew 26.3% to Rs 14025 crore.

Total deposits grew 11.6% to Rs 74911 crore.

Current deposits grew 2.5% to Rs 3031 crore.

Savings deposits grew 13.5% to Rs 15357 crore.

CASA grew 11.5% to Rs 18388 crore.

NRI deposits showed a healthy growth of 14.43% with deposits accounting for 27.27% of total deposits.

Agriculture and SME base grew 8.1% to Rs 21203 crore.

90.7% of Large Corporate Advances above Rs 100 crore are under Investment Grade.

79.2% of Total Corporate Loan Book is Investment Grade.

Retail Loans (Excl. Gold), Agriculture & SME has grown by 17.2% (Y-o-Y).

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

Cost of funds stood at 5.56% against 5.58% qoq and 5.52% yoy.

Yield on funds stood at 7.93% against 7.95% qoq and 8.10% yoy.

Cost to income ratio stood at 55.8%. This was impacted by decline in other income.

Investment book stood at Rs 18607 crore.

Restructured Standard Advance stood at Rs 22 crore.

Total stressed assets stood at Rs 2772 crore against Rs 2572 crore qoq.

PCR stood at 41.9%.

Retail slippage was 0.42% of the advances.

In September 2018 quarter mortgage Loans Sanctioned stood at 1,982 Nos. and amount of mortgage loans sanctioned stood at Rs 587 crore.

Total branches stood at 1249 as on September 2018. During the quarter the bank added 2 branches and 9 ATMs.

A clear shift of focus to retail, agriculture and MSME, has consistently started delivering improvement in the bank's performance.

The Capital Adequacy Ratio stands at 12.11% as on September 2018 against 12.23% as on June 30.

The bank is on target of 1% credit cost.

Gross slippages to be Rs 500 crore for the next 2 quarters.

Second half of the year is usually much better for advances.

In Q3 and Q4 the bank is targeting a 20% growth in agriculture advances as five regions across South India – Hyderabad, Chennai, Madurai, Coimbatore and Bengaluru – have been contributing significantly to its agri-loan portfolio. Growth in this segment in Q2 was almost 8%.

Due to floods in Kerala, Rs 100 crore is expected to slip into NPA. Thus, against the guidance of Rs 200 crore retail NPA for Q3 and Q4 it will be Rs 250 crore NPA in Q3 and Q4 each.

Regarding exposure to IL&FS the bank said that it does not comment on individual clients. But they have given a filing on BSE regarding its exposure to certain infrastructure company exposure. The company has provided Rs 20 crore on that account. This is a lumpsum provision that it has made. The bank has no exposure to SPVs.

The bank expects insurance distribution fees to go up in second half.

The bank is looking at Rs 150 crore or 1% credit costs. But a lot would depend on the resolution of IBC loans.

Board decided to augment the capital by issue of Basel III compliant Tier II Bonds not exceeding Rs 500 crore in one or more tranches with or without green shoe option.