South Indian Bank looking to maintain deposit growth of around 11% in FY25, says CEO

The bank's board has recommended a dividend of Rs.0.30 per equity share.

Thrissur based South Indian Bank is looking at growing deposits by 11 percent in financial year 2024-25, said P Seshadri, Managing Director and Chief Executive Officer (MD and CEO). “After reporting a 11 percent growth in deposits in the financial year 2023-24, we are not looking at aggressively growing our deposits. We are aiming at around the same 11 percent growth in FY25,” Seshadri said.

In an exclusive interaction with Moneycontrol, Seshadri also said that the bank is looking at a similar credit growth and the bank will focus on growing its retail and micro, small and medium enterprises (MSME) portfolio.

Q4 numbers

The lender on May 2 reported a 14 percent year-on-year (YoY) dip in net profit at Rs 287.5 crore compared to a net profit of Rs 333.9 crore in the year ago period. On the deposits front, the lender’s total deposits stood at Rs 1.01 lakh crore versus 91,651 crore in the year-ago period. The total credit of the lender grew by 12 percent in FY24, and stood at Rs 78,061 crore versus Rs 69,804 crore in last year.

The credit-deposit (CD) ratio stood at 76.6 percent, showing a marginal increase from 76.2 percent YoY and 75.98 percent sequentially.

“We saw steady growth in deposits and advances in FY24. And our credit-deposit (CD) ratio stood under 80 percent,” Seshadri said.

The net interest income (NII), the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors, rose 2.1 percent YoY to Rs 875 crore versus Rs 857 crore in the corresponding quarter of FY23. On asset quality, the gross non-performing assets (GNPA) stood at 4.50 percent in the March quarter versus 5.14 percent last year. Net NPA came at 1.46 percent against 1.86 percent. Seshadri highlighted that NII grew YoY but sequentially fell as the bank worked on diversifying portfolio. “Our asset quality improved and continues to look better and we had lowest SMA level accounts,” Seshadri said.

Also read: Federal Bank, South Indian Bank announce measures on co-branded credit cards

On co-lending credit card

Following the March 12 directions of the Reserve Bank of India (RBI), South Indian Bank stopped issuing co-branded credit cards to new customers on account of regulatory deficiencies. The bank said that it will not onboard new customers on their co-branded credit cards until it is fully compliant with directions under the RBI Master Direction on Credit Card and Debit Card issuance. However, the lender added that it will continue to service existing customers who hold co-branded credit cards. The bank has one co-branded credit card in partnership with State Bank of India (SBI), which is available in two variants SimplySAVE and Platinum.

On this, Seshadri said that the bank is still internally looking at options. “We would like to get back to the credit card business if the RBI permits,” Seshadri said.

Gold loan business

In the past few months, the central bank has been cautioning gold loan lenders on their business with their fintech partners. Among banks, South Indian Bank is a major player in the gold loan segment. The gold loan segment of the bank stood at Rs 15,513 crore, growing by 12 percent YoY.

On its co-lending ties, Seshadri said the bank would hope to have new tie-ups. “Most of our business comes from our branches but we would hope to have new tie-ups,” Seshadri said.