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The Thrissur-headquartered South Indian Bank is planning to raise capital during the current fiscal to take care of its future requirement and also to start a non-banking finance company as a fully-owned subsidiary.
In a telephonic conversation with Business Line on the sidelines of a meeting of the board of the bank at Kochi, SIB's Chief Executive Officer and Managing Director, Dr A.V. Joseph, said the bank proposed to raise Rs 1,000 crore to start the NBFC arm, which would focus on bullion business and also meet its future business growth plans.
The bank is targeting a business volume of Rs 62,000 crore this fiscal; it plans to add another 59 branches, which will take its network to 700 by March 2012.
SIB got the in-principle go-ahead from the banking regulator last month for altering its object clause in the Memorandum of Association to form a non-deposit-taking NBFC, as a wholly-owned subsidiary of the bank.
Dr Joseph said he would place it before the board, for approval. Today, he said, “we will seek shareholders' approval on our capex plan and possibly complete the process by September.”
Performance
The bank's net profit grew 25 per cent to Rs 293 crore in the just-ended fiscal against Rs 234 crore in end March 2010. The bank has recommended a dividend of 50 per cent (40 per cent).
Its total business crossed the targeted Rs 50,000-crore mark to Rs 50,520 crore, up 29 per cent.
Deposits were up by Rs 6,709 crore to Rs 29,721 crore and advances by Rs 4,684 crore to Rs 20,799 crore. The CASA also increased from Rs 5,323 crore to Rs 6,404 crore.
The total income grew by 23 per cent to Rs 2,642.71 crore (Rs 2,144.18 crore).
Its NIM (Net Interest Margin) stood at 3.06 (2.77).
Net NPA improved to 0.29 per cent from 0.39 per cent, thanks to the extensive monitoring and recovery measures, said Dr Joseph.
“Though our CAR (Capital Adequacy Ratio) at 13.17 per cent is well above the regulatory requirement of 9 per cent, it dipped marginally during the just ended fiscal compared to the earlier year due to credit growth. The level is comfortable, but our decision to raise the equity base would further strengthen CAR,” he said.
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