Calibrated strategy with pan-India focus is paying off: South Indian Bank MD

The Thrissur based South Indian Bank is making steady progress in its business from rest of India markets with the share from these regions steadily improving year-on-year.

P.R.Seshadri, Managing Director and CEO in an interaction said the share of the rest of India markets in loan book expanded to 33 per cent as of the quarter ending June 2024, up from 28 per cent in the corresponding period of the previous year.

Kerala market accounted for 34 per cent in the loan book in the quarter ending June 2024, while south India (ex-Kerala) accounted for the remaining 33 per cent.

The overall loan book grew to ₹82,580 crore, up from ₹74,102 crore. The calibrated diversification strategy with its pan-India focus is paying off, he said, adding that a significant momentum has been witnessed in the retail segment largely driven by home, auto, gold and agriculture.

P.R.Seshadri, Managing Director and CEO, South Indian Bank 

The advances to the corporate segment registered a 23 per cent growth to ₹33,984 crore from ₹27,522 crore. With robust growth, there is a burgeoning demand from the business front which is indicative of a conducive business environment in the country, he said.

“We managed to achieve a 13 per cent growth in gold loans despite stiff competition from NBFC’s”, Seshadri said.

The continuing focus on asset quality and recovery has mirrored the dropping NPA levels. The reasons for the declining NPA by 2 bps can be attributed to the efforts of the recovery team which demonstrated very high quality collections, he said.

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While the gross NPA has dived to 4.50 per cent in the first quarter, down from its peak levels of 6.97 per cent as at end-March 2021, the net NPA came down sharply to 1.44 per cent from 4.71 per cent.

The Provision Coverage Ratio also has improved significantly to 79.22 per cent in the first quarter from 58.70% in March 2021. Despite the tightening interest rate cycle, the bank has kept its cost of funds steady and lower at 4.91 per cent for the quarter ending June 2024, while Yield on Funds were higher at 7.85 per cent for the period, he said.

The bank is also in the process of building new automated digital channels for automation of renewal of small ticket working capital limits, working capital granular loans- GST based where application to approval is automated, he added.