The focus on retail, MSME and agriculture advances enabled Kerala-based South Indian Bank register a 20 per cent growth in net profit at ₹84.48 crore in Q2 against ₹70.13 crore in the corresponding period of the previous fiscal.

The operating profit for the quarter has grown from ₹309.78 crore to ₹411.45 crore, a growth of around 33 per cent. The net interest income registered a growth of 15 per cent and while other income 58 per cent.

VG Mathew, Managing Director and CEO, said the bank has also been able to meet the targeted levels of recovery upgrades, which helped in reducing the GNPA level from 4.96 per cent to 4.92 per cent on a sequential basis. The provision coverage ratio has improved to 48.07 per cent from 41.86 per cent a year ago.

The bank’s strategy of bringing down the corporate exposure and increasing the retail, MSME and agri portfolios strengthened its balance sheet. The pure retail portfolio has grown at 20 per cent and already accounts for 30 per cent of the loan book, taking the bank closer to its stated objective of becoming a retail banking powerhouse, he said.

He said that agriculture and MSME portfolios have grown by 20 per cent and 16 per cent, and the combined portfolio now constitutes 39 per cent of the loan book. The bank could bring down the corporate exposure from 35 per cent of the loan book to 31 per cent during the last one year, in line with the strategy of reducing large corporate exposure.

On the bank’s capital-raising plans, Mathew said the board has given approval to issue ₹500 crore Tier II bonds as well as dilution of basic equity by 20 crore shares. This would be in the market in the second half.

On the muted demand affecting vehicle loans, he said the exposure in automobile loans was not very high, and the bank still has the opportunity for growth in this sector. “We are still in a growing phase and with a network of 870 branches; growth is well distributed across the country, he added.

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