Kerala-based South Indian Bank hopes its business will touch Rs 1-lakh crore by March 2014. As on September 30, 2012, the bank’s business stood at over Rs 67,000 crore.

According to Cheryan Varkey, Executive Director, South Indian Bank will look to achieve 25 per cent growth in its business this fiscal. The bank’s advances stood at Rs 29,000 crore as on September 30.

“We have grown by 23-24 per cent till date (up to September). Though the current economic conditions do pose a challenge in achieving this growth, we are hopeful of growing our business as per our targeted plan this year,” Varkey told Business Line at the inauguration of its corporate branch here on Monday.

The bank will focus on small loans, primarily aimed at the traders’ community.

“We are looking at tapping traders in the textiles, pharmaceuticals and jeweller community to grow our advances,” he said.

Talking about asset quality, Varkey said, the bank would aim to bring down the share of gross non-performing assets to around 1.2 per cent of its total advances by the end of this fiscal. Gross NPA of the bank currently stands at 2 per cent.

Nafed loan

“Our asset quality has been good except for our Rs 150-crore exposure to Nafed (National Agricultural Cooperative Marketing Federation of India Ltd) which has slipped into NPA during the second quarter due to employee-related fraud,” he said.

The bank has already made a 15 per cent provisioning during the second quarter and plans to provide 15-20 per cent every quarter for the next 3-4 quarters. “We hope that Nafed will be out of our books by March 2014,” he said.

According to Varkey, there is likely to be some pressure on margins as the yield on advances was getting slightly suppressed.

The bank, which had a net interest margin of 3.1 per cent during the quarter ended September, aims to achieve a NIM of 3 per cent by the end of this fiscal.

shobha.roy@thehindu.co.in

(This article was published on December 10, 2012)
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