The Hindu Business Line : South Indian Bank net zooms

The net profit of South Indian Bank has grown by 485 per cent to touch Rs 50.90 crore (Rs 8.70 crore) for 2005-06. The Board has declared an 18 per cent dividend for the year.

Addressing a press conference at Kochi, Dr V.A. Joseph, Chairman of the bank said: "The commendable performance is on account of the thrust given to NPA recovery and also effectively bringing down the cost of deposits."

Asset segment

In the asset segment of the bank, there has been a shift from treasury to other banking operations. This has resulted in an increase in the net interest income and the spread has gone up from 2.74 to 3.25 per cent. With this shift in focus, the bank could contain the burden of depreciation, which was one of the main reasons for the lower performance last year, Dr Joseph said.

Growing by 15.11 per cent, the total business volume of the bank crossed Rs 16,000 crore. Deposits grew by Rs 1,086 crore or 12.79 per cent, while advances grew by Rs 1,007 crore or 18.77 per cent. The bank has collected Rs 161 crore (Rs 114 crore) from impaired assets during the year. The low-cost deposit component in the deposit base has gone up from 20 to 25 per cent and the average cost of deposits today is 4.58 per cent.

The bank is expected to take over the management of a UAE-based exchange company which is currently run by a Sri Lanka-based bank.

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