South Indian Bank plans to raise Rs. 240 crores from General and Life Insurers

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.

South Indian Bank Plot LoanHe 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.

%d bloggers like this: