Aim to grow deposits & advances by 25%: South Indian Bank

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Aim to grow deposits & advances by 25%: South Indian Bank

Dr VA Joseph, managing director and chief executive of South Indian Bank tells CNBC-TV18 that they aim to grow deposits and advances by 25% in the current year.

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Excerpts from Business Lunch on CNBC-TV18 Watch the full show » ALSO READ See latest News about South Ind Bk See previous management interviews See what other Experts & Brokerages are saying about South Ind Bk South Ind Bk BSE | NSE 30/05/12 Are Mutual Funds betting on South Ind Bk?

Dr VA Joseph, managing director and chief executive of South Indian Bank tells CNBC-TV18 that they aim to grow deposits and advances by 25% in the current year. "We are also trying to maintain net interest margins at 3% for the year," he added.

South Indian Bank reported a jump of 32% in profits for the quarter ended 31 December. Net interest income grew 34% to Rs 274 crore.

Going forward, Joseph says that they plan to increase the percentage of corporate loans in their portfolio. "We are now starting six corporate finance branches in major metros during this financial year, so there will be a big shift from other loans to corporate loans in the coming year," he explained.

Below is an edited transcript of his interview with Mitali Mukherjee. Also watch the accompanying video.

Q: Could you walk us through what you expect to see for the rest of the year in terms of whether advances and deposits can continue to grow at this 25-30% range and margins can be held stable?

A: We hope to grow at 25% growth both in deposits and advances by year end. On the net interest margin, we are trying to see that this 3% is kept for the year end also.

Q: A large part of your advances growth in the last quarter was courtesy gold loans that South Indian Bank extended. So if you just had to breakup what happened on the advances growth this time, how much did you sell specifically on gold loans?

A: Gold loan portfolio is high compared to the other advances, but the corporate advances also have gone up. We are now starting six corporate finance branches in major metros during this financial year, so there will be a big shift from other loans to corporate loans in the coming year. So the same growth in gold loans may not be there in the next year.

Q: Going into this calendar year, what is it that you are confident of doing on the two key parameters which is your NII growth and whether NPAs will hold steady?

A: We could bring NPAs substantially down during this year and we are trying our best to see that this level is maintained. It's a very challenging environment, but we hope we should be able to maintain the present level for the year end also.