South Indian Bank conducted a conference call on 20 October 2023 to discuss its financial results for the quarter ended September 2023. PR Seshadri, MD&CEO of the bank addressed the call:

Highlights:

The bank has recorded 10% growth each in deposit as well as advances end September 2023. The casa deposits have increased by 2%.

The net interest margin of the bank has improved by 10 bps to 3.31% in Q2FY2024.

The provision coverage ratio has jumped by 948 bps to 66.77%.

The bank has reduced GNPA ratio to 4.96% and the NNPA ratio to 1.70% end September 2023

The RoA has improved to 0.97%. Return on equity was higher at 15.38% in Q2FY2024.

The recoveries and upgradations were strong at Rs 475 crore in Q2.

The capital adequacy ratio has improved to 16.69% of which Tier I capital was 14.12%.

The bank has recorded disbursements of Rs 21353 crore in Q2FY2024, of which corporate disbursements were at Rs 15697 crore, gold Rs 2792 crore, MSME Rs 1335 crore and other retail at Rs 1529 crore.

The gold disbursements were at Rs 5675 crore in H1 with the average ticket size of Rs 1.56 lakh. The gold loan book has increased significantly by 16%. The bank is also witnessing significant traction in the personal loan segment.

The bank has issued 3.32 lakh credit cards with the average monthly spends of Rs 20500 and the outstanding book has increased to Rs 1164 crore.

One third of the deposits were contributed by the NRI deposits which are low cost deposits.

The fresh slippages of loans stood at Rs 312 crore in Q2FY2024.

The restructured loan book stood at Rs 1129 crore end September 2023, with the provisions of Rs 476 crore.

The bank has recorded 14% growth in the net interest income and 13% growth in the fee income in Q2FY2024.

There is a bias towards increase in the cost of funds for the bank. About one third of the term deposits of the banks are schedule for reprising during next 6 months.

The segments such as corporate, gold and credit cards are the growth drivers for the loan growth of the bank, while the bank is also focused on the granular loan growth.

The loan book of the bank is expected to reach Rs 80000 crore by end March 2024.

On the assets side the duration of the book is a short as compared to be other competitor.