Thrissur-based South Indian Bank is aiming for a net profit of Rs 230 crore by the end of this financial year, by systematically repricing deposits and increasing fee-based income.
The bank also aimed to achieve a business growth of 20 per cent at Rs 36,000 crore by the end of March 2010, said Abraham Thariyan, Executive Director of the bank.
"As on March 2009, our net profit was Rs 194 crore. We aim to have a net profit of Rs 230 crore by March 2010. This we we will do by repricing deposits and increasing non-interest income," said Thariyan.
The bank would bet on low-cost NRI deposits, mainly from the Gulf countries, and Current Account Savings Accounts (CASA), to increase profitability, he added. The share of low-cost NRI and CASA deposits for the bank is close to 33 per cent of the total deposits.
The bank's business stands at Rs 32,000 crore as on June 2009. "We have currently set a credit and deposit growth target of 20 per cent for this year. However, this will be revised based on how the credit picks up in the next few days," said Thariyan. "Our high cost bulk deposits are in the process of getting repriced for the last three months. Bulk deposits currently account for 19 per cent of our total deposits," he said.
The bank's net interest margin was at 3.11 per cent as on June 2009 and it would aim to maintain it at 3 per cent level during this fiscal, he said. The capital adequacy ratio of the bank stands at 15 per cent as on June 2009. "We raised Rs 200 crore Tier II capital post June this year so our Capital Adequacy Ratio (CAR) is pretty comfortable, we will not look at raising additional capital this fiscal," he added.
