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

South Indian Bank registered a 3% rise in Interest income to Rs 1490.67 crore in the quarter ended June 2017.

4% fall in interest expenses to Rs 1029.96 crore saw net interest income (NII) rise 23% to Rs 460.71 crore.

OP rose 46% to Rs 379.49 crore.

Provision and contingencies jumped 97% to Rs 224.31 crore after which PBT rose 7% to Rs 155.18 crore.

In FY 2017, the bank identified a Non Performing Advance as a fraud. The net book value has been decided to be amortised over a period of up to four quarters beginning December 2016. Accordingly, the Bank has charged Rs 28.51 crore in June 2017 quarter and Rs 57.82 crore in FY 2017. The unamortised balance carried forward as at June 2017 is Rs 28.51 crore. The said amortised balance had been drawn down from revenue and other reserves during the year ended March 2017.

Net profit increased 7% to Rs 101.47 crore.

Gross NPA stood at Rs 1695.71 crore as of June 2017 quarter against Rs 1149.01 crore in March 2017 quarter and Rs 1651.60 crore as of June 2016 quarter.

In percentage terms, %GNPA stood at 3.61% as of June 2017 quarter against 2.45% in March 2017 quarter and 3.96% as of June 2016 quarter.

Net NPA stood at Rs 1182.51 crore as of June 2017 quarter against Rs 674.56 crore in March 2017 quarter and Rs 1191.83 crore as of June 2016 quarter.

In percentage terms, %NNPA stood at 2.54% as of June 2017 quarter against 1.45% in March 2017 quarter and 2.89% as of June 2016 quarter.

CASA grew 23% from Rs 13454 crore to Rs 16586 crore. The bank is focused on improving its CASA. It has strategy & road map in place to increase CASA funds. It will have centralized processes which will allow branches to focus on garnering low cost funds.

Deposits increased 14% from Rs 57889 crore to Rs 65791 crore.

Core deposits grew 15% to Rs 55712 crore. Non core deposits grew 9% to Rs 10079 crore.

Current deposits grew 40% to Rs 3064 crore, while savings deposits grew 20% to Rs 13522 crore.

Advances increased 12% from Rs 42024 crore to Rs 47264 crore.

The bank has ZERO accounts in Watchlist of Large Corporate Book.

Retail Loans (Excl. Gold), Agriculture & SME has grown by 15%

In a bid to expand its retail business the bank will focus on retail loan products and faster processing of loans.

Kerala accounted for 43% of the total SME loan book. South India (excluding Kerala) accounted for 33% and rest of India accounted for 24%.

Average SME loan book per account stood at Rs 19.69 crore in june 2017 quarter against Rs 17.66 crore as on March 2017.

To strengthen its SME base the bank plans to have cluster based approach in industry hubs and hopes to be sole banker to SMEs for all banking needs. For this, it will have a dedicated vertical to penetrate SME banking.

To enhance its asset quality the bank will have cautious approach on large corporate lending and special recovery cell for monitoring non performing and restructured assets. It will also granulize loan portfolio to spread out risk.

It has tied up with PFG Forex for remittance facility for the benefit of Indian expatriates from Australia.

During the quarter, other income grew 26% to Rs 219 crore. Other income includes fees earned from providing services to customers, commission from non-fund based banking activities, earnings from foreign exchange transactions, selling of Third party products, proportionate income from sale of PSL certificate profits/loss on sale of investments (net), recoveries from accounts written off.

To improve its other income the bank will focus on increasing banking services for SME, Retail, NRI. It also plans to enhance treasury capabilities & increase branch strength and expand PoS & ATM Network.

Out of the total loan book, corporate advances stood at 37.10% or Rs 17536 crore. SME stood at 22.96% or Rs 10851 crore and retail (excluding gold) stood at 22.51% or Rs 10641 crore.

In June 2016 quarter the bank sanctioned 1155 mortgage loans amounting to Rs 316 crore.

Around 17% of the Agriculture & SME Loans are backed by Additional Security by way of gold.

The bank is defocusing from Power & Infra Sectors.

It is also shifting focus from large corporate to SMEs.

Provision Coverage Ratio is 44.64%.

Transaction volumes and value dropped in December 2016 quarter owing to large number of ATM's being non-operational and volume restriction due to demonetisation

 Funds raised recently helped raise capital base.

 It tied up with Kotak Life and SBI Life for Life Insurance and Max Bupa for Health Insurance distribution. The strong growth witnessed by these insurance majors will help in boosting fee income for SIB.

 Treasury and forx grew income 19.8% during the quarter.

 Investment book stood at Rs 18558 crore.

The bank has fully recognized watch list account. This was the reason for spike in NPAs.

The bank has been resolving to solve the NPA issue and has zero watch list account.

Employee count spiked due to recruitment after 2 years. Despite that business per employee and business per branch have been good.

It expects cost to income ratio to be 47-48% in FY 2018.

Total branches grew from 850 in March 2017 to 851 in June 2017. Total ATM grew from 1320 in March 2017 to 1344 in June 2017.

For FY 2018 the bank proposed to open 25 branches, 116 ATMs and 25 registration counters.

Outlook for loan growth in FY 2018 is 18-20%. It grew by 17.14% last year.

Target for loan growth for future years is 20-22%.

NIM has improved from 2.74% to 2.80% in June 2017 quarter. It expects to be at 2.85% for FY 2018. To improve NIM further CASA has to improve further. Its target is to take CASA to 30%, which is around 25.2% now.

NPA has completely migrated to system driven recognition. This migration might have also had some impact on NPA. NPA is expected to be significantly lower going forward and is expected to be in the range of maximum Rs 100 crore per quarter. Out of this recoveries are also expected to improve.

This quarter it did not have any sale to ARC but it is looking for opportunities.

The bank has no account under SDR. It has 2 accounts in 5/25 worth Rs 300 crore. Both the accounts are healthy and are standard accounts as of now.

RIDF portfolio will come down significantly going forward.

Due to its tie ups, remittance will see steady growth going forward but insurance business is expected to grow exponentially from the near term.

Security receipts (SR) outstanding are Rs 1275 crore, same as last quarter.

Credit cost will be significantly lower compared to FY 2017.