investor presentation june 2012 - south indian · pdf file · 2016-08-05schemes,...

INVESTOR PRESENTATION

JUNE 2012

South Indian Bank… At A Glance

2

• Number of years in banking business83 Years

• Number of branches706

• Number of ATM’s700

• Business as on June 2012` 64502Cr

• Business Growth (Y – to – Y)20%

• Last 5 years business CAGR25%

• Net Profit for the Q1 ending June 2012` 123.04Cr

• Net Interest Margin (June 12)3.15 %

• Capital Adequacy Ratio (Basel II –June 12)13.16%

• Net Non-Performing Assets (June 12)0.35%

3

History & Background

Future Strategy

Overview

Key Strength

Business Performance

4

&

Background

First private sector bank to open a NRI branch in Nov,1992

& an IFB branch in March 1993.

One of the oldest Banks in South India.

First among private sector Banks in Kerala to become aSCB in 1946.

Listed in NSE, BSE & CSE- IPO in 1998. FPO In 2006.

Incorporated on January 25, 1929. Head Office:

Thrissur, Kerala.

Successful QIP in Sept 2007.

First bank among the Private sector banks in Kerala to

open an "Overseas Branch”, June ’93.

History & Pioneering Initiatives

5

Shareholding Pattern – as on June-2012

Diversified shareholding & tradition of good corporate governance practices

7

Individuals37.80%

Corporates7.84%FI's and Banks

6.42%

FII's46.09%

Others1.85%

Individuals

Corporates

FI's and BanksFII's

Others

Vision & Mission

8

CORPORATE VISION

MISSION

To emerge as the most preferred bank in the country in terms ofbrand, values, principles with core competence in fostering customeraspirations, to build high quality assets leveraging on the strong and vibranttechnology platform in pursuit of excellence and customer delight and tobecome a major contributor to the stable economic growth of the nation.

To provide a secure, agile, dynamic and conducive banking environment tocustomers with commitment to values and unshaken confidence, deploying thebest technology, standards, processes and procedures where customerconvenience is of significant importance and to increase the stakeholders’value.

Healthy Fundamentals

Adequately Capitalised;

•13.16% CRAR & 10.90% Tier 1 ratio

Asset Quality;

•1.08 % GNPAs & 0.35% NNPAs

•67.71% NPA Coverage ratio

•21.55% ROE, % 1.22ROAA

•Over 85% secured loan book

Strong Growth

• One of the fastest growing banks in

India.

• 25% CAGR in business in last 5 years

•Constant growth in Business &

Profitability

Most advanced technology in all

spheres of banking operations &

delivery channels.

Key Competitive Advantage

• Fast expanding branch network

• High Asset Quality with well diversified

Loan portfolio

• 9% market share in Kerala’s NRI deposit

base.

•Strong boost to Income from high

yielding gold loans forming 24% of the

loan book.

Significant Turnaround

•Benchmarked HR Practices & Introduced

Performance Linked Incentive

schemes, ESOP, Annual Performance

contest- Awards.

•Forward looking Human Capital

Management Strategy

•Highly skilled human capital- 46% of

human capital under age 30 with

professional qualification

Key Strengh

10

Spread of Branches

11

Average Branch & ATM network

growth @ 20% (for last & current FY)

Vast and Rapidly Growing Branch Network

12

Rural10415%

Semi- Urban32446%

Urban14620%

Metro13219%

Rural

Semi- Urban

Urban

Metro

Branch Network Category wise as on June 2012

13

STATESNo: of

BranchesSTATES

No: of Branches

STATESNo: of

Branches

Kerala 387 Chhattisgarh 3 Himachal Pradesh 1

Tamil Nadu 124 Orissa 2 Meghalaya 1

Karnataka 46 Madhya Pradesh 2 Nagaland 1

Andhra Pradesh 40 Rajasthan 2

Maharashtra 25 Pondicherry 2

Delhi 23 Assam 2

West Bengal 10 Jharkhand 2

Uttar Pradesh 9 Bihar 1

Gujarat 6 Uttaranchal 1

Punjab 5 Chandigarh 1

Haryana 4 Jammu & Kashmir 1

Goa 4 Tripura 1 Total 706

State wise distribution of Branches Category wise as on June 2012

14

Num

be

r o

f B

ran

ch

es a

dd

ed

Network Expansion (Number of branches added)

0

10

20

30

40

50

60

70

25 25

30

50

6159

50

15

Nu

mb

er

of

Bra

nch

es

Branch Network

475500 530 580

641700 750

0

100

200

300

400

500

600

700

800

16

Nu

mb

er

of

AT

Ms

ad

de

d

Network Expansion (Number of ATMs added)

0

20

40

60

80

100

120

140

160

180

FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 (proposed)

50 55

93

116

174

137

17

Nu

mb

er

of

AT

Ms

ATM Network

225280

373

489

663

800

0

100

200

300

400

500

600

700

800

900

FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 (proposed)

Project SIBERTECH- 100% Core Banking Solution (CBS) using FINACLE from Infosys.

Centralized Data Centre with most advanced technological platform in a new state of the art “Green” complied building at Kochi, Kerala.

Emphasis on IT security & Risk Management - Disaster-recovery site at Bangalore for CBS & Regular IS Audits.

Member of INFINET & 700 On-line ATMs through NFS tie-up with other banks

A host of hi-tech products- International debit & credit cards, high speed & secure Internet & Mobile Banking for retail & corporate clients.

Online Value added services - Stock trading, ticket booking, mobile recharges, shopping, Utility payments, offerings.

SIB FINS Card -A smartcard based FI initiative in association with M/s Coromandel InfoTech India Ltd., Chennai, as the technology service provider.

Successfully implemented RTGS & NEFT in all branches.

Successfully launched Smart card at Christ University, Bangalore which works as Access card, Identity card, ATM card and card for payment of fees in Christ College for around 10000 students.

Best-in-class IT products & solutions in all banking operations like Treasury, Risk Management, AML, Credit Processing, HR, Audit & KYC.

18

EFFICIENT SERVICE LEVERAGING ON TECHNOLOGY

RANGE OF PRODUCTS

19

Loan Products Deposit products Other Products

Retail Business Loans

Housing Loans/

Mortgages

Auto Loans

Personal Loans

Education Loans

Employee Group Loans

SME Loans

•Savings Bank Accounts

•Current Accounts

•Fixed/ Recurring

Deposits

• Depository Account

• Mutual Funds sales

• Life Insurance sales

• General Insurance sales

• Group Insurance sales

• E-payment

• Cash Management Services

• Online Foreign Inward Remittance

• m-Commerce

• New Pension Scheme

•Gold Coins/ingots

Commercial Banking

•Working Capital Loans

•Term Loans

•Letters of Credit

•Banks Guarantees

• Bill Finance

•Wholesale Deposits

Retail Banking

Wholesale Banking

20

Particulars March 10 March 11 March 12 June 12

Number of Business Correspondents(BCs) appointed

0 7 40 40

Number of villages with populationabove 2000 provided with bankingfacility (Rural branches & BCs)

107 117 169 170

Number of ‘No-frills’ accounts(including Students A/c)

6.83 Lakh 10.26 Lakh 11.99 Lakh 12.38 Lakh

No-frills accounts - amount64.06 crore

102.72 crore

130.47 crore

43.55 crore

We have been empanelled by UIDAI for opening ‘No-Frills account’ based on AADHAAR enrollment in 26 districts & 39 villages already allotted for Financial Inclusion.

We have implemented the Smart Card model for FI as per the open standards and as recommended by IBA /IDRBT Technical Committee. Also implemented the Smart Card model for Urban FI.

FINANCIAL INCLUSION

Life Insurance with LIC

General Insurance with Bajaj Allianz

Mutual funds –All the leading AMCs in India

Sri Lanka's Hatton National Bank (HNB)

• Improve the remittance flow to India and Sri Lanka

More than 30 exchange houses & banks in middle east

• Facilitating fast remittances for more than 2lakh NRI customers, mostly from Gulf countries

Providing managerial support to overseas exchange house - HADI exchange house

21

Strategic Tie Ups

Best Bank in Asset Quality (Pvt Sect or Bank) Award - Dun & Bradstreet 2011

Best Bank in Priority Sector Lending (Pvt Sect or Bank) Award - Dun & Bradstreet 2011

Technology Excellence Award in 2010 from IRDBT

India’s Best Bank 2010 Award – “Business world – Price Water House CoopersBest Banks Survey 2010”

Best Asian Banking Website - Asian Banking & Finance Magazine, Singapore.

Best Old Pvt Sector Bank - Financial Express India's Best Banks 2008-2009.

Best Pvt Sector bank in the Service quality segment Outlook Money - CFore Survey.

Best Website Award from Kerala Management Association

RECOGNITIONS

22

Business Performance

23

24

Net Profit

123.04

82.49

Business

64502

53773

Advance

27349

22151

Deposit

37153

31622

Net NPA

0.35%

0.29%

Gross NPA

1.08%

1.07%

(` in Crores)

Financial Highlights – FY13 Q1

June 2012

June 2011

49% 20% 23% 17%

Profitability

25

• 45%Operating Profit

• 49%Net Profit

Year to Year Growth

104

143

208

5882

123

0

50

100

150

200

250

JUNE 2010 JUNE 2011 JUNE 2012

Operating Profit

Net Profit

ROA coming mainly from Core Income

26

*Annualized

Improved Quality of Earnings

1.16

0.890.95

1.181.23

0.91

1.02

1.22

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

JUNE 2009 JUNE 2010 JUNE 2011 JUNE 2012

ROA*

ROAA*

27

Total Business and Growth

Business grew over 3 times at CAGR of 25% in 5 years

(` in Crores)

21,34226,020

31,316

40,217

53,773

64,502

0

10000

20000

30000

40000

50000

60000

70000

JUNE 2007 JUNE 2008 JUNE 2009 JUNE 2010 JUNE 2011 JUNE 2012

Business Trend

28

Credit Deposit Ratio

66.06%

71.07%70.05%

73.61%

62.00%

64.00%

66.00%

68.00%

70.00%

72.00%

74.00%

76.00%


29

Deposits increased @ 25% CAGR

(` in Crores)

Deposits Growth

15,378

18,67423,331

31,622

37,153

0

10000

20000

30000

40000

JUNE 2008 JUNE 2009 JUNE 2010 JUNE 2011 JUNE 2012

30

Low Cost deposits form 27.28% of total deposits.

Annual Trend in Low cost depositsComposition of Deposits

(` in Crores)(` in Crores)

Deposits – Composition and Trend

SB Deposit

639017% CD

Deposit14454%

Term Deposit2931879%

3460

4271

5464

6390

8451052 1326 1445

2868 2945 2935

2302

0

1000

2000

3000

4000

5000

6000

7000


SB Deposit CD Deposit NRE Deposit

Advances increased by 27% (CAGR)

31

(` in Crores)

Advances Growth

10642

12642

16886

22151

27349

0

5000

10000

15000

20000

25000

30000

JUNE 2008 JUNE 2009 JUNE 2010 JUNE 2011 JUNE 2012

Adavance

32

Advances – Composition (June 2012)

Composition of Advances March -2012

Sector Upto 5 Crores Above 5 Crores Total % to total

Agriculture 1297.69 324.89 1622.58 5.93%

MSME 1552.92 262.50 1815.42 6.64%

Large Scale Industries 463.82 3919.85 4383.67 16.03%

Housing 1134.19 377.97 1512.16 5.53%

Commercial Real Estate 66.30 43.10 109.40 0.40%

NBFC 58.30 1555.59 1613.89 5.90%

Food Credit 0.00 607.99 607.99 2.22%

Infrastructure 0.00 3958.05 3958.05 14.47%

Gold Loan (Non Priority) 5409.54 0.00 5409.54 19.78%

FSLD (Non Priority) 983.65 0.00 983.65 3.60%

LC Bills 0.00 2626.88 2626.88 9.61%

Miscellaneous 1429.16 1276.53 2705.69 9.89%

Total 12395.57 14953.35 27348.92 100.00%

33

Trend in Cost of Deposits Trend in Yield on Advances

Trend in Cost & Yield (Annual)

6.93%6.43%

7.60%

8.41%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%


Cost of Deposit11.82%

10.77%

11.75%13.01%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%


34

Trend in Cost of Deposits(cumulative)

Trend in Yield on Advances(cumulative)

Trend in Cost & Yield (Quarterly)

6.57%

7.60% 7.66% 7.77%

7.94%8.41%

5.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

8.50%

9.00%

Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12

10.90%

11.75%12.11% 12.30%

12.50%

13.01%

9.50%

10.00%

10.50%

11.00%

11.50%

12.00%

12.50%

13.00%

13.50%


35

SLR & Non SLR Securities Composition of Investment Bookas on 30- June 2012

` in Crores

Category Amount Percentage

Held to Maturity 7733.55 83.16%

Held for Trading 11.29 0.12%

Available for Sale 1554.43 16.72%

Total 9299.27 100%

Investment Portfolio

41474552

5711

7286

8886.91

641

1451

7891181

412.37

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

JUNE 2008

JUNE 2009

JUNE 2010

JUNE 2011

JUNE 2012

SLR Securities Non-SLR Securities

(` in Crores)

36

Jun-11 Sep-11 Dec-11 Mar-12 Jun-12

Total

Investment

Portfolio

4.61 3.69 4.07 4.08 4.08

Total HM

Investment

Portfolio

4.68 4.61 4.55 4.51 4.57

Total HFT

and AFS

together

Investment

Portfolio

0.39 0.39 0.64 0.90 1.39

Duration of Investments

6.77%

6.05%

6.69%7.28%

3.20%

4.00%

4.80%

5.60%

6.40%

7.20%

8.00%

8.80%


Investment Portfolio

Yield on Investments

(In Years)

37

The bank has CRAR in excess of the required minimum of 9% stipulated by RBI.

CRAR – Basel 2

Adequately Capitalized

15.1016.00

13.51 13.16

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00


Yearly

38

Strong Core Capital. Dependence on Capital Instruments low.

Strong Core Capital (Tier 1 & Tier 2 CRAR)

11.27% 10.86% 10.80%

9.61%

11.54%10.90%

2.74% 2.65% 2.68% 2.42% 2.46% 2.26%

0%

2%

4%

6%

8%

10%

12%

14%


Tier 1 CRAR Tier 2 CRAR

39

RWA Tier 1 Capital Tier 2 Capital Total Capital

Mar 10 11377 1412 337 1749

Jun 10 11270 1476 326 1802

Sep 10 11861 1551 330 1881

Dec 10 13174 1622 340 1962

Mar 11 14647 1650 401 2051

Jun 11 15152 1645 401 2046

Sep 11 15173 1643 408 2051

Dec 11 17069 1640 414 2054

Mar 12 16987 1960 417 2377

June 12 17955 1957 406 2363

(` in crores)

Strong Core Capital (Trend)

40

Gross Annual income grew over times in 5 years at CAGR 30%

Total Income Trend in Expenses

Trend in Income & Expenses

(` in crores)

268337

438477

677

937

0

100

200

300

400

500

600

700

800

900

1000

JUNE 2007

JUNE 2008

JUNE 2009

JUNE 2010

JUNE 2011

JUNE 2012

Int Exp Staff Exp Other Exp

322405

522582

820

11440

0

200

400

600

800

1000

1200

1400

JUNE 2007

JUNE 2008

JUNE 2009

JUNE 2010

JUNE 2011

JUNE 2012

Int on Adv Int on Inv Oth Int Non-Int Income

41

Yield on Funds Cost of Funds

Trend in Income

8.73%

8.85%

9.53%

8.45%

9.47%

10.61%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

11.00%

JUNE 2007

JUNE 2008

JUNE 2009

JUNE 2010

JUNE 2011

JUNE 2012

5.97%

6.40%

6.89%

5.83%

6.94%7.67%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

JUNE 2007

JUNE 2008

JUNE 2009

JUNE 2010

JUNE 2011

JUNE 2012

42

Particulars June 2010 June 2011 June 2012

Commission, Exchange & Brokerage 8 9 12

Profit on sale of investment (Net) 9 15 20

Profit on sale of Land, Building & Other

assets (Net)- ~ 1 -

Profit on Exchange Transactions (Net) 4 5 9

Miscellaneous Income

1. Processing Fees 2 3 4

2. Rent Received - - -

3. Others (Income on Technology products,

Third party products, Sale of Gold coins,

Non fund business etc)18 19 30

Total 41 52 75

(` in crores)

Composition of Non-Interest Income

43

Net profit grew at CAGR of 34% (Y-Y) in last 5 years.Net Interest margin (NIM) remains at satisfactory range.

Growth in Net Profit

Profitability

Net Interest Margin

(` in Crores)

2.80% 2.80% 2.80%

3.15%

2.60%

2.70%

2.80%

2.90%

3.00%

3.10%

3.20%


30.3738.62

44.4258.44

82.49

123.04

0

20

40

60

80

100

120

140

JUNE 2007

JUNE 2008

JUNE 2009

JUNE 2010

JUNE 2011

JUNE 2012

44

Return on Average Asset

Efficiency

Return on Equity Return on Asset

44

16.10%

12.90% 13.20%15.20%

17.18%

21.55%

0%

5%

10%

15%

20%

25%

JUNE 2007

JUNE 2008

JUNE 2009

JUNE 2010

JUNE 2011

JUNE 2012

0.85% 0.89% 0.85% 0.89%0.95%

1.18%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

JUNE 2007

JUNE 2008

JUNE 2009

JUNE 2010

JUNE 2011

JUNE 2012

45

Efficiency

Cost / Income Ratio Earning Per Share (Annualized)

45

1.73 1.71 1.58

2.07

2.93

4.35

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

JUNE 2007

JUNE 2008

JUNE 2009

JUNE 2010

JUNE 2011

JUNE 2012

55.70%

47.80%

55.00%50.10%

44.22% 44.19%

0%

10%

20%

30%

40%

50%

60%

JUNE 2007

JUNE 2008

JUNE 2009

JUNE 2010

JUNE 2011

JUNE 2012

46

(` in Lakh)

Profit Per Employee

(` in Lakh)

Productivity

Average Business Per Employee Profit Per Employee

46

527579

652754

924

1041

0

200

400

600

800

1,000

1,200

JUNE 2007

JUNE 2008

JUNE 2009

JUNE 2010

JUNE 2011

JUNE 2012

3.143.53

3.874.59

6.09

8.2

0

1

2

3

4

5

6

7

8

9

JUNE 2007

JUNE 2008

JUNE 2009

JUNE 2010

JUNE 2011

JUNE 2012

47

Productivity

Average Business Per Branch Operating Profit Per Branch

47

42.48

50.6855.75

66.85

78.71

89.36

0

10

20

30

40

50

60

70

80

90

100

JUNE 2007

JUNE 2008

JUNE 2009

JUNE 2010

JUNE 2011

JUNE 2012

44.8755.50

61.7272.70

89.99

118.72

0

20

40

60

80

100

120

140

JUNE 2007

JUNE 2008

JUNE 2009

JUNE 2010

JUNE 2011

JUNE 2012

(` in Lakhs)(` in crores)

48

Asset Quality for Q1 ending June

Gross NPA & Net NPA(%) Provision Coverage

48

3.70%

1.98% 1.85%

1.32%1.07% 1.08%

0.83%

0.49%0.68%

0.39% 0.29% 0.35%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

JUNE 2007

JUNE 2008

JUNE 2009

JUNE 2010

JUNE 2011

JUNE 2012

Gross NPA Net NPA

75.03%70.55%

58.38%

71.20% 73.15%67.71%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

JUNE 2007

JUNE 2008

JUNE 2009

JUNE 2010

JUNE 2011

JUNE 2012

49

Asset Quality maintained at high level.

( ` in crore)

Change in Gross

NPA & Net NPA June 2010 June 2011 June 2012

Gross NPA 223 236 295

Gross NPA (%) 1.33% 1.07% 1.08%

Net NPA 64 63 95

Net NPA (%) 0.39% 0.29% 0.35%

Current Provision

Coverage Ratio (%)71.20% 73.15% 67.71%

Asset Quality

49

50

(` in Crore)

Particulars June 2010 June 2011 June 2012

For NPA advance 10.89 2.77 9.07

For Depreciation on Investments 2.74 3.98 3.78

For NPA investment 0.26 - -

For standard assets 2.20 13.78 2.34

For income tax 29.26 39.81 59.06

For Restructured advances - -0.04 10.54

Other impaired assets 0.61 0.34 -0.34

Total Provisions and Contingencies 45.96 60.64 84.45

Break-up of Provision

50

51

Performance Highlights Year ended

Mar-11 Jun-11 Sep-11 Dec-11

Year ended

Mar-12June-12

CRAR Basel 2 (%) 14.01% 13.51% 13.48% 12.03% 14.00% 13.16%

Return on Average Assets

(Annualised) 1.05% 1.02% 1.05% 1.06% 1.12% 1.22%

NIM (%) 3.10% 2.80% 3.00% 3.05% 3.10% 3.15%

Gross NPA's 230 236 230 234 267 295

Net NPA 60 63 58 58 76 95

Gross NPA (%) 1.11% 1.07% 0.99% 0.94% 0.97% 1.08%

Net NPA (%) 0.29% 0.29% 0.25% 0.24% 0.28% 0.35%

Provision Coverage 73.64% 73.15% 74.70% 75.18% 71.36% 67.71%

CASA 6404 6790 7038 7280 7179 7835

CASA % 21.55% 21.47% 21.30% 21.51% 19.67% 21.09%

Deposits 29721 31622 33038 33834 36501 37153

Advances 20799 22151 23348 25050 27635 27349

Yield on advances 10.90% 11.75% 12.11% 12.30% 12.50% 13.01%

(` in Crore)

Performance Highlights

51

FUTURE STRATEGY

52

Key Focus

Aims to increase total business mix to ` 1.25 lakh Crore by March 2015.

Enhancing income from Technology products, Treasury, Forex and gold coins

Ramping up low cost as well as retail liabilities.

Enhancing productivity per branch/per employee

53

IMPORTANT NOTICE

54

No representation or warranty, express or implied is made as to, and no reliance should be placed on, thefairness, accuracy, completeness or correctness of such information or opinions contained herein. The informationcontained in this presentation is only current as of its date. Certain statements made in this presentation may not bebased on historical information or facts and may be “forward looking statements”, including those relating to theCompany’s general business plans and strategy, its future financial condition and growth prospects, and futuredevelopments in its industry and its competitive and regulatory environment. Actual results may differ materiallyfrom these forward-looking statements due to a number of factors, including future changes or developments in theCompany’s business, its competitive environment and political, economic, legal and social conditions in India. Thiscommunication is for general information purpose only, without regard to specific objectives, financial situations andneeds of any particular person. This presentation does not constitute an offer or invitation to purchase or subscribefor any shares in the Company and neither any part of it shall form the basis of or be relied upon in connection withany contract or commitment Important Notice whatsoever. The Company may alter, modify or otherwise change inany manner the content of this presentation, without obligation to notify any person of such revision or changes. Thispresentation can not be copied and/or disseminated in any manner.

54

55

THANK YOU

investor presentation june 2012 - south indian · pdf file · 2016-08-05schemes,...

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