Kerala-headquartered South Indian Bank (SIB) is planning to sharpen its focus towards micro, small, and medium enterprises (MSMEs) and retail businesses this year as part of the lender’s business expansion plan, said the bank’s newly joined Managing Director (MD) and Chief Executive Officer (CEO) P R Seshadri to Moneycontrol in an exclusive interview.
"We want to get some growth on the MSME and retail sides of the house this year. So for that, we are doing a bunch of things in that business. Our focus is on systems, processes, technology, digitalisation, etc," said Seshadri on January 19.
Seshadri added that SIB has seen growth in recent times come disproportionately from three areas. "One is corporate, which is the largest source of growth. The second is credit cards and personal loans. The third is gold. It's not in order of magnitude, but just naming three. The corporate book is a very high-quality book. 96-97 percent of the corporate book is rated A, and about 5 to 6 percent is rated AAA," he added.
As of December 2023, the bank's gold loan book is Rs 15,369 crore, which has increased 18 percent from Rs 13,053 crore last year. The personal segment has reported Rs 17,515 crore business as of December 2023.
The Kerala-based bank’s corporate loan book portfolio stood at Rs 29,892 crore as of December 2023. More than 3,77,000 credit cards were issued with an outstanding book of Rs 1,427 crore as of December 2023.
Increasing physical presence
On increasing the presence of SIB, the MD & CEO of the bank said that currently, they are in a consolidation phase. "We try and digest all the new branches that are being grown out, and we get productivity also there," he said.
However, he said that they will soon open a branch in Ayodhya seeing the huge business opportunities there. "Ayodhya is an outlier. I mean, there is a lot of stuff happening in Ayodhya. Folks in our Delhi Regional Office are studying it. We will talk to them, and we'll figure it out. I mean, under the circumstances, if a large number of tourists and other activities are expected there, we'd also like to get our fair share of it," Seshadri added.
At this point, the SIB has 948 branches, two ultra-small branches, three satellite branches, 1,182 ATMs, and a representative office in Dubai, UAE. Seshadri pointed out that banks are taking cyber security as a very serious subject. “We want to ensure that we keep a tight lid on this. Having said that, this is an evolving area. We continue to focus on it, and we continue to invest so that we can give our customers the best from a security standpoint," Seshadri added.
Earnings numbers
On January 18, SIB reported a net profit of Rs 305.6 crore for the October-December quarter of 2023-24, marking a 197.42 percent jump from Rs 102.75 crore in the year-ago period.
The bank's gross non-performing asset (NPA) stood at 4.74 percent, down from 5.48 percent recorded in the same quarter last year. On the other hand, net NPA for the quarter stood at 1.61 percent, improving from 2.26 percent on a year-on-year (YoY) basis.
Retail advances of Federal Bank grew by 20.39 percent to reach Rs 65,041.08 crore.
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