Driven by a robust loan book growth Thrissur-based South Indian Bank 's (SIB) third quarter (October-December) net profit shot up by 32% year-on-year to Rs 280 crore meeting analysts' expectations. With this, the lender has recorded the highest ever quarterly profit. It is also planning to raise Rs 1,000 crore capital through qualified institutional placement (QIP)in the first quarter of the next financial year 2012-13.
"Our capital raising plan of course depends on the revival of market condition," V A Joseph, MD & CEO of the bank said.
"We are now focusing more on corporate loans. We will open six dedicated corporate branches in Mumbai, Kolkata, Bangalore, Hyderabad, Chennai and New Delhi by the beginning of FY13. We do not have any sector bias in sanctioning loans but will stick to rating standards of companies. We will maintain our net interest margin above 3% in FY12."
The SIB's loan book expanded by more than 30% to Rs 25,050 crore in Q3. The share of coporate loans is at 55% of the total book. During the quarter, the bank has added Rs 5,000 crore (both to companies and individuals) to its book. The net interest income or the difference between interests earned and paid out rose by nearly 34% to Rs 273 crore. NIM inched up to 3.05% from 3.03% recorded in the July-September quarter.
Bucking the trend of worsening asset quality, the bank has shown resilience on this count. Its gross non-performing asset (NPA) ratio has improved from 0.99% to 0.94% sequentially while net NPA ratio was little changed at 0.24% during the three months period.
The bank's capital adequacy ratio stood at around 12% exclusive of the last nine months profits. After the proposed capital raising, it would be around 18%, according to the K S Krishnan, CFO and General Manager, SIB.
The bank's deposit book grew by 25% Y-o-Y to Rs 33,834 crore. It has recently hiked its deposit rates for non-resident Indian customers on external term deposits across maturities to 6.75% from 3.82%. This was followed by the Reserve Bank of India's decision to de-regulate NRI deposit rates.
"This hike will not have any significant impact on our cost of borrowings. NRI deposits form only 10% SIB's total deposits and term deposits constitute a tiny 3% out of that 10%. We do not have any plan to raise savings rate as of now," Krishnan told Moneycontrol.com.
SIB shares on Monday rose my than 1% to close the day at Rs 22.85 on the NSE.
Source: www.moneycontrol.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
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