Kerala-based South Indian Bank (SIB) has received Board permission to raise ₹ 240 crores from Kotak Mahindra Life, HDFC Life, ICICI Lombard and SBI Life on a preferred status. The Bank also intends to raise another ₹ 510 crores to further its Vision 2024, which will focus on 6Cs.
SIB recorded a net loss of ₹ 92 crores during the quarter ended December 2020, associated with a ₹ 91 crore gain throughout the same session last year.
SIB’s CEO Murali Ramakrishnan stated that the damage suffered was mainly due to 4 extraordinary events, including a plan on security receipts (SRs), collective credit reversal upfront requirement and one-time added employee provision demand on account of the Wage settlement, which got achieved through the quarter which resulted in ₹ 240 crore.
He was selected as the SIB’s CEO in October 2020 and will be the first from the private sector in South Indian Bank. His selection occurs at a time when the lender is gazing at establishing its retail roster. Ramakrishnan was a key figure in developing the retail portfolio at ICICI Bank.
SIB’s corporate book is presumed to come down to 15% from 24%, as the bank is preparing to focus on RAM (retail, agriculture and MSME). RAM benefaction is expected to develop to 85 in the next 3 years against 76% now.
By 2021-24, SIB aims a loan ledger of ₹ 1 trillion (from ₹ 63,000 crores as of December 2020), CASA mix of 35%, and PCR of over 65% (around 72% inclusive of write-offs as of December 2020 NIM of 3.5 per cent).
While prevailing growth trends persist muted because of Covid-19, the bank is confident about a recovery in growth from the initial quarter of 2021-22. Personal loans will probably grow faster, doubling in the time of 2-3 years, supported by a mild base.
SIB has been producing reduced performance, with higher requirements and opex influencing profits, while its margin characterization remains reserved. Business growth continues tepid, impacted by challenging circumstances.