The net profit of South Indian Bank fell 38 per cent in Q4 of FY19 at Rs.70.51 crore, against Rs.114.10 crore in the corresponding period of the previous fiscal on higher loan-loss provisions.
However, the operating profit in Q4 grew 16 per cent to Rs.328 crore from Rs.311 crore, which is a healthy sign for the bank, said VG Mathew, MD and CEO.
The clean-up of the large corporate book, which has been going on for the last four years, has come to an end.
Even in the current quarter, non-corporate NPAs are only Rs.250 crore, despite a sharp spike in agri NPAs (Rs.100 crore).
On agri NPAs, he said there has been some delay in payments because of certain customer expectations with regard to debt-waiver schemes and concessions.
The bank has a corporate NPA of Rs.114 crore due to the failure of a borrower (a Kerala-based medical college) to get approval renewed from the regulatory authority.
The bank showed strong recovery performance during the year and achieved the targeted level of Rs.500 crore.
On credit-growth prospects, Mathew said the bank is targeting 20 per cent growth, for which everything was in place. The retail portfolio accounts for 29 per cent of the loan book, which takes the bank closer to the stated objective of becoming a retail banking powerhouse.
Over the last four years, the bank has stayed away from various stressed sectors.
“With the legacy problem of the large corporate sector under control and with strong growth in the retail and MSME sectors, we are on the threshold of a period of a stable and risk-controlled growth and expansion,” he added.
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