South Indian Bank is focused on aggressive strategies to drive deposit growth while maintaining a solid asset growth trajectory. The bank’s goal is to grow deposits by 8-10%, assets by 10-12% and align its balance sheet for a more retail-focused future, Managing Director Public Relations Seshadri said in an interview with CNBC TV-18. He said that this is true.
“We were cognizant of the fact that the CD ratio would gradually rise. We are currently at about 80%. At the moment we are not sure what to do and how to be a little more aggressive on the deposit side. , and we are reevaluating whether we need to double or not,” Seshadri added.
The bank reported results for the September quarter, showing steady progress across key indicators. Net interest income (NII) increased by 6.3% YoY to Rs 882.7 million.
Additionally, South Indian Bank witnessed improvement in asset quality with gross non-performing assets (NPAs) decreasing to 4.4% from 4.5% in the previous quarter. Net NPAs also improved, dropping from 1.44% to 1.31% quarter-on-quarter. Regarding the net interest margin, Seshadri clarified that regulatory changes in how penalties are recorded were the main factor behind the perceived change, adding, “There was no material change in the net interest margin. “This is due to changes in the way fines are recorded.” and is currently classified as other income rather than interest income. ”
Looking to the future, South Indian Bank is eyeing the retail and MSME sectors as key drivers of future growth.
Seshadri said that although MSME growth remains slow, there will be a particular focus on gold and home-backed loans. “Growth is expected to continue in these areas, but the pace may slow slightly from the high levels seen recently.”
Balance sheets will also undergo a transformation due to the shift away from corporate lending. Corporate loans currently account for 40% of the bank’s portfolio, but Seshadri said this will shrink to about one-third in the medium term, with personal loans and loans to MSMEs accounting for the remainder. I’m predicting it.
The company’s market capitalization is 6.64 billion rupees, and the stock price has risen 4% in the last year.
(Editor: Unni Krishnan)
