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Tuesday, May 5, 2015

South Indian Bank reports 40% drop in FY’15 net

South Indian Bank has registered a 40 per cent drop in its annual net profit at Rs.307.20 crore ended March 31, 2015 against Rs.507.50 crore in the previous fiscal year.

The operating profit has also shown a 7.55 per cent decrease in the fourth quarter at Rs.816.27 crore against Rs.882.89 crore.

The decline in operating profit was due to increased provisioning requirements towards employee benefits based on the recently concluded industry-wide wage settlement and actuarial liability on superannuation benefits due to softening of market yield, V.G.Mathew, Managing Director and CEO said.

According to him, the year was challenging due to stress in corporate credit book especially in sectors like power and infrastructure. The increased provisions on account of stressed assets and provisions towards employee cost brought the pressure on net profit.

The net operating income registered a 5.45 per cent increase from Rs.1,767.24 crore to Rs. 1,863.31 crore. The growth in non interest income was Rs.128.61 crore during the year.

The financial year 2015 was a year of consolidation and the bank has introduced several measures aimed at refocusing on the retail segment for advances as well as deposits with very encouraging results.

During the period, he said the bulk deposits have been brought down from 29 per cent to 21.67 per cent and the core deposit recorded an increase of 20.61 per cent and CASA grew by 8.77 per cent. The NRI portfolio also grew commendably at 29.17 per cent.

He pointed out that the bank has decided to pass on the benefit on account of revision in liability pricing during the last year to the customers and has reduced the base rate by 30 basis points respectively.

There are plans to increase the branch network, extension counters and ATMs by 25, 25 and 150 units respectively during the current year. The current level of CRAR is comfortable and there is sufficient headroom for raising fresh equity/ bonds in case of need, he added.

Source : Thehindubusinessline


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