Highlights of the call:

South Indian Bank registered a 2% rise in Interest income to Rs 1322.43 crore in the quarter ended March 2015. A 4% rise in interest expenses to Rs 975.34 crore saw net interest income (NII) fall 5% to Rs 347.09 crore.

Other income grew 26% to Rs 121.94 crore, which took net total income up 2% to Rs 469.03 crore.

PBT fell 85% to Rs 27.24 crore. Net profit dived 87% to Rs 16.32 crore.

In FY 2015, South Indian Bank registered 5% rise in Interest income to Rs 5286.22 crore. An 8% rise in interest expenses to Rs 3919.99 crore saw net interest income (NII) falling 2% to Rs 4366.23 crore.

Other income grew 35% to Rs 497.07 crore, which took net total income up 5% to Rs 1863.30 crore.

PBT fell 45% to Rs 402.21 crore.

EO gain was Rs 43.39 crore against nil. Thus PBT after EO fell 39% to Rs 445.60 crore.

As tax expenses fell 38% to Rs 138.40 crore, net profit fell 39% to Rs 307.20 crore.

Other income increased by 35% during the year with strong contribution from treasury, forex and ATM usage fees.

To increase other income, the bank will focus on treasury, exchange and other services for SME, retail and NRI clients.

In FY 2015 Operating expenses grew 19% to Rs 1047.04 crore. Operating expenses include the impact of additional employee expenses (Rs 52 crore) on account of differential due to settlement and actuarial liabilities; amortization of actuarial liabilities has been completed.

Provision and contingencies jumped 166% to Rs 414.05 crore. Provisions increased on account of NPA, restructured assets and FITL. Increase in Provisions primarily driven by historical loan book issues.

Net shortfall of Rs 8.32 crore in sale of NPA assets to ARCs will be recognized over 2 years.

There was also a provision of Rs 28.09 crore on account of FITL during March 2015 quarter. Amortization of FITL provisioning has now been completed.

Exceptional Item refers to reversal of excess depreciation charged till March 31, 2014 (net of taxes) due to change in depreciation method from WDV to SLM.

The bank has used the year for consolidation, improving asset quality and significantly shifting focus to retail segment.

The bank has taken NPA management initiatives wherein it has formed a Special Recovery Cell headed by DGM and staffed by legal team. This has resulted in Collection efforts for large ticket NPAs which were responsible for multiple recoveries over past 6 months.

Housing loans is its key focus segment. In this it will focus on centralized processing and faster approvals. Total housing loan book increased from Rs 1544 crore to Rs 2106 crore. The bank has set up special retail hub in Cochin to increase focus on housing finance.

It is in the process of setting up two more hubs, One in South India and one in North India.

Other focus areas of retail segment are auto and agri. In FY 2015 all focus areas of retail segment grew well but was offset by gold business.

The company is consciously moving from corporate sector to retail sector.

Gold loan portfolio has fallen down from Rs 6275 crore to Rs 4591 crore.

With more contribution from retail segment the bank is confident of future growth.

Kerala franchise providing a strong base with growth in advances led by expansion into other geographies, both in South India (ex-Kerala) and Rest of India.

Its future strategy for includes strengthening long-term franchise value with focus on Retail and SME segments.

For Improving asset quality the bank will form a specialized cell focused on recovery from NPA accounts. It will also clean books through sale of stressed assets to Asset Reconstruction

Companies (ARCs)

Restructured assets increased from Rs 1938 crore in December 2015 to Rs 2068 crore as on march 2015.

Total slippage was around Rs 82 crore from the restructured book.

The restructuring pipeline as of now would be Rs 100-Rs 150 crore.

RoA stood at 0.52% in March 2015 against 0.92% in March 2014.

RoE stood at 8.56% in March 2015 against 15.07% in March 2014.

It will also look to improve its in core deposits for long term growth.

The management is confident that CASA will improve with concerted efforts at branch level.

Total Rural Infrastructure Development Fund (RIDF) on the book is Rs 2631 crore as on date.