INVESTOR PRESENTATION MARCH 2012
South Indian Bank At A Glance 83 Years 700 663 `64136 Cr 27% 25% `401 Cr 3.10 % 14.00% 0.28% Number of years in banking business Number of branches Number of ATM s Business as on March 2012 Business Growth (Y to Y) Last 5 years business CAGR Net Profit for the FY ended March 2012 Net Interest Margin (March 12) Capital Adequacy Ratio (Basel II March 12) Net Non-Performing Assets (March 12) 2
History & Background Overview Key Strength Business Performance Future Strategy 3
& Background 4
History & Pioneering Initiatives One of the oldest Banks in South India. Incorporated on January 25, 1929. Head Office: Thrissur, Kerala. First among private sector Banks in Kerala to became a SCB in 1946. First private sector bank to open a NRI branch in Nov,1992 & an IFB branch in March 1993. First bank among the Pvt sector banks in Kerala to open an "Overseas Branch, June 93. Listed in NSE, BSE & CSE- IPO in 1998. FPO In 2006. Successful QIP in Sept 2007. 5
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Shareholding Pattern as on 31.03.2012 Others 1.93% FII's 46.15% Individuals 37.85% Individuals Corporates Fis and Banks FII's Others Fis and Banks 6.42% Corporates 7.66% Diversified shareholding & tradition of good corporate governance practices 7
Vision & Mission CORPORATE VISION To emerge as the most preferred bank in the country in terms of brand, values, principles with core competence in fostering customer aspirations, to build high quality assets leveraging on the strong and vibrant technology platform in pursuit of excellence and customer delight and to become a major contributor to the stable economic growth of the nation. MISSION To provide a secure, agile, dynamic and conducive banking environment to customers with commitment to values and unshaken confidence, deploying the best technology, standards, processes and procedures where customer convenience is of significant importance and to increase the stakeholders value. 8
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Key Strengh Healthy Fundamentals Adequately Capitalised; 14.00% CRAR & 11.54% Tier 1 ratio Asset Quality; 0.97% GNPAs & 0.28% NNPAs 71.36% NPA Coverage ratio 18.53% ROE, 1.12% ROAA 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. 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 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. 10
Vast and Rapidly Growing Branch Network Spread of Branches Average Branch & ATM network growth @ 10% (for last & current FY) 11
Branch Network Category wise as in March 2012 Metro, 103, 15% Urban, 146, 21% Rural, 130, 18% Semi- Urban, 321, 46% Rural Semi- Urban Urban Metro 12
State wise distribution of Branches Category wise as in March 2012 STATES No: of Branches STATES No: of Branches KERALA 385 MADHYA PRADESH 2 TAMIL NADU 122 ORISSA 2 ANDHRA PRADESH 46 PONDICHERRY 2 KARNATAKA 40 RAJASTHAN 2 MAHARASHTRA 25 ASSAM 2 DELHI 21 BIHAR 1 WEST BENGAL 10 CHANDIGARH 1 UTTAR PRADESH 9 JAMMU & KASHMIR 1 GUJARAT 6 UTTARANCHAL 1 GOA 5 TRIPURA 1 HARYANA 4 HIMACHAL PRADESH 1 PUNJAB 4 MEGHALAYA 1 CHATTISGARH 3 NAGALAND 1 JHARKHAND 2 TOTAL 700 13
Number of Branches added Network Expansion (Number of branches added) 70 61 59 60 50 50 40 30 25 25 30 20 10 0 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 14
Number of Branches Branch Network 800 700 600 500 400 475 500 530 580 641 700 300 200 100 0 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 15
Number of ATMs added Network Expansion (Number of ATMs added) 180 174 160 140 116 120 93 100 80 60 40 20 50 55 0 FY 08 FY 09 FY 10 FY 11 FY 12 16
Number of ATMs ATM Network 700 600 663 500 400 300 200 225 280 373 489 100 0 FY 08 FY 09 FY 10 FY 11 FY 12 17
EFFICIENT SERVICE LEVERAGING ON TECHNOLOGY 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 & 663 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
RANGE OF PRODUCTS Loan Products Deposit products Other Products Retail Banking 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 System Gold Coins/ingots Commercial Banking Wholesale Banking Working Capital Loans Term Loans Letters of Credit Banks Guarantees Bill Finance Wholesale Deposits 19
FINANCIAL INCLUSION Particulars March 10 March 11 March 12 Number of Business Correspondents appointed (BCs) 0 7 40 Number of villages with population above 2000 provided with banking facility (Rural branches & BCs) Number of No-frills accounts (including Students A/c) 107 117 169 6.83 Lakh 10.26 Lakh 11.99 Lakh No-frills accounts - amount 64.06 crore 102.72 crore 130.47 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. 20
Strategic Tie Ups 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
RECOGNITIONS 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 Coopers Best 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 22
Business Performance 23
Financial Highlights FY12 37% 27% 33% 23% (` in Crores) Net Profit Business Advance Deposit Net NPA Gross NPA MARCH 2012 401 64136 27635 36501 0.28% 0.97% MARCH 2011 292 50520 20799 29721 0.29% 1.11% 24
Profitability FY12 700 651 600 500 400 300 200 525 293 401 Operating Profit Net Profit 100 0 FY 10-11 FY 11-12 Year to Year Growth Operating Profit Net Profit 24% 37% 25
Improved Quality of Earnings 1.20 1.00 0.89 1.01 0.96 1.09 1.07 1.05 0.92 0.89 0.99 1.12 0.80 0.60 0.40 ROA ROAA* 0.20 0.00 FY-08 FY-09 FY-10 FY-11 FY-12 *Annualized RoA coming mainly from Core Income 26
Projection Projection Business Trend Total Business and Growth 120000 100000 (` in Crores) 100,000 80000 60000 50,520 64,136 78,000 40000 25,910 30,237 39,127 20000 0 FY-08 FY-09 FY-10 FY-11 FY-12 FY-13 Mar FY-14 Mar Business grew over 2.4 times at CAGR of 25% in 5 years 27
Credit Deposit Ratio 76% 74% 74.74% 72% 70% 68% 68.97% 68.76% 68.94% 66% 65.51% 64% 62% 60% FY-08 FY-09 FY-10 FY-11 FY-12 28
Deposits Growth Deposits (` in Crores) 40000 36,501 35000 30000 25000 20000 15000 15,156 18,092 23,012 29,721 10000 5000 0 FY-08 FY-09 FY-10 FY-11 FY-12 Deposits increased @ 25% CAGR 29
Deposits Composition and Trend Composition of Deposits Annual Trend in Low cost deposits (` in Crores) (` in Crores) SB Deposit, 5917, 16% CD Deposit, 1262, 4% 7000 6000 5000 4000 4271 5203 5917 3000 Term Deposit, 29322, 80% 2000 1000 0 1052 1201 1262 443 499 418 FY-10 FY-11 FY-12 SB Deposit CD Deposit FCNR Dep Low Cost deposits form 20% of total deposits. 30
Advances Growth Adavance (` in Crores) 30000 27635 25000 20000 15000 10000 10754 12145 16115 20799 5000 0 FY-08 FY-09 FY-10 FY-11 FY-12 Advances increased by 33% (Y-to- Y) 31
Advances Composition (March 2012) Sector Upto 5 Crores Above 5 Crores Total % to total Agriculture 1668.64 339.88 2008.52 7.27% MSME 1448.79 316.74 1765.53 6.39% Large Scale Industries 458.01 4125.45 4583.46 16.59% Housing 1093.75 91.96 1185.71 4.29% Commercial Real Estate 61.43 29.38 90.81 0.33% NBFC 53.40 1517.12 1570.52 5.68% Food Credit 0.00 407.38 407.38 1.47% Infrastructure 0.00 3448.29 3448.29 12.48% Gold Loan (Non Priority) 5236.68 0.00 5236.68 18.95% FSLD (Non Priority) 1515.15 0.00 1515.15 5.48% LC Bills 0.00 2848.91 2848.91 10.31% Other Bills 217.64 0.00 217.64 0.79% Miscellaneous 1193.22 1563.33 2756.55 9.97% Total 12946.71 14688.44 27635.15 100.00% 32
Trend in Cost & Yield (Annual) Trend in Cost of Deposits Trend in Yield on Advances Cost of Deposit Yield on Advances 10.20% 15.60% 8.80% 7.40% 7.26% 6.93% 7.94% 13.80% 12.00% 11.73% 11.14% 12.50% 6.00% 6.72% 6.57% 10.20% 10.58% 10.90% 4.60% 8.40% 3.20% 6.60% FY-08 FY-09 FY-10 FY-11 FY-12 FY-08 FY-09 FY-10 FY-11 FY-12 33
Trend in Cost & Yield (Quarterly) Trend in Cost of Deposits Trend in Yield on Advances 10.00% 9.00% 14.00% 13.00% 12.50% 8.00% 7.00% 7.60% 7.66% 7.77% 7.94% 12.00% 11.00% 11.75% 12.11% 12.30% 6.00% 6.57% 10.00% 10.90% 5.00% 9.00% 4.00% Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 8.00% Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 34
Investment Portfolio SLR & Non SLR Securities Composition of Investment Book ` in Crores 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 8214 6803 5641 4067 3618 2008 2121 954 1515 1186 FY-08 FY-09 FY-10 FY-11 FY-12 Category Amount Percentage Held to Maturity 8229.00 87.54% Held for Trading 263.00 2.80% Available for Sale 908.00 9.66% Total 9400.00 100.00% SLR Securities Non-SLR Securities 35
Investment Portfolio Yield on Investments Duration of Investments Yield on Investment - Quarterly Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 8.80% 8.00% 7.20% 6.40% 5.60% 4.80% 4.00% 3.20% 6.92% 6.77% 6.60% 5.90% 6.39% FY-08 FY-09 FY-10 FY-11 FY-12 Total Investment Portfolio Total HM Investment Portfolio Total HFT and AFS together Investment Portfolio 3.67 3.61 3.69 4.07 4.08 4.81 4.68 4.61 4.55 4.51 0.42 0.39 0.39 0.64 0.90 36
Adequately Capitalized 16 15.39 CRAR Basel 2 15 15 14 14.01 14.00 Yearly 14 13 FY-10 FY-11 FY-12 The bank has CRAR in excess of the required minimum of 9% stipulated by RBI. 37
Strong Core Capital (Tier 1 & Tier 2 CRAR) 14% 12% 11.27% 10.86% 10.80% 11.54% 10% 9.61% 8% 6% 4% 2% 2.74% 2.65% 2.68% 2.42% 2.46% 0% Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Tier 1 CRAR Tier 2 CRAR Strong Core Capital. Dependence on Capital Instruments low. 38
Strong Core Capital (Trend) (` in crores) 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 39
Trend in Income & Expenses Total Income Trend in Expenses (` in crores) 4000 3500 3830 3500 3000 3179 3000 2500 2000 1500 1000 1434 1851 2144 2643 2500 2000 1500 1000 1163 1493 1734 2117 500 500 0 FY08 FY09 FY10 FY11 FY12 0 FY08 FY09 FY10 FY11 FY12 Int on Adv Int on Inv Oth Int Int Exp Staff Exp Other Exp Gross Annual income grew over 2.6 times in 5 years at CAGR 27% 40
Trend in Income Yield on Funds Cost of Funds 13.60% 8.60% 12.40% 11.20% 10.00% 8.80% 7.60% 8.70% 9.42% 8.82% 9.99% 8.76% 7.80% 7.00% 6.20% 5.40% 6.08% 6.50% 6.23% 5.93% 7.14% 6.40% 4.60% 5.20% 3.80% 4.00% FY-08 FY-09 FY-10 FY-11 FY-12 3.00% FY-08 FY-09 FY-10 FY-11 FY-12 41
Composition of Non-Interest Income Particulars Period ended 31/03/2012 Period ended 31/03/2011 (` in crores) Commission, Exchange & Brokerage 38.42 35.41 Profit on sale of investment (Net) 40.78 39.37 Profit on sale of Land, Building & Other assets (Net) 0.82-0.96 Profit on Exchange Transactions (Net) 25.61 19.07 Miscellaneous Income 1. Processing Fees 17.75 15.36 2. Rent Received 0.01 0.01 3. Others (Income on Technology products, Third party products, Sale of Gold coins, Non fund business etc) 123.68 88.43 Total 247.07 196.69 42
Profitability 450 400 350 300 250 200 150 100 50 0 (` in Crores) Growth in Net Profit 402 293 234 195 152 FY-08 FY-09 FY-10 FY-11 FY-12 3.40% 3.30% 3.20% 3.10% 3.00% 2.90% 2.80% 2.70% 2.60% 2.50% Net Interest Margin 3.10% 3.06% 2.77% FY-10 FY-11 FY-12 Net profit grew at CAGR of 27% (Y-Y) in last 5 years. Net Interest margin (NIM) remains at satisfactory range. 43
Efficiency Return on Equity Return on Average Asset 20% 18% 16% 14.93% 15.74% 15.86% 18.53% 1.14% 1.12% 1.10% Return on Average Asset 1.09% 1.12% 14% 13.06% 1.08% 1.07% 12% 10% 1.06% 1.04% 1.05% 8% 1.02% 1.01% 6% 1.00% 4% 0.98% 2% 0.96% 0% 0.94% FY-08 FY-09 FY-10 FY-11 FY-12 FY-08 FY-09 FY-10 FY-11 FY-12 44 44
Efficiency Cost / Income Ratio Earning Per Share (Annualized) 60% 4 (Amount in ` ) 50% 40% 30% 46.22% 47.80% 47.14% 46.82% 48.65% 4 3 3 2 2 1.68 1.72 2.07 2.59 3.55 20% 1 1 10% 0 FY-08 FY-09 FY-10 FY-11 FY-12 FY-08 FY-09 FY-10 FY-11 FY-12 45 45
Productivity Average Business Per Employee Profit Per Employee 1,200 1,000 (` in Lakh) 971 8 7 Profit Per Employee (` in Lakh) 7.13 800 600 530 586 676 792 6 5 4 3.59 4.31 4.80 5.46 400 3 2 200 1 0 0 FY-08 FY-09 FY-10 FY-11 FY-12 FY-08 FY-09 FY-10 FY-11 FY-12 46 46
Productivity Average Business Per Branch Operating Profit Per Branch (` in Crores) 90 80 70 60 50 45.16 40 30 20 50.36 57.20 66.56 78.62 100 90 80 70 60 50 40 30 20 54.57 68.19 71.28 82.46 (` in Lakh) 93.74 10 10 0 0 FY-08 FY-09 FY-10 FY-11 FY-12 FY-08 FY-09 FY-10 FY-11 FY-12 47 47
Asset Quality for the year ended March Gross NPA & Net NPA(%) Provision Coverage 2.50% 2.00% 1.78% 2.18% 80% 70% 60% 75.93% 70.82% 73.94% 71.36% 1.50% 1.32% 50% 48.45% 1.00% 1.13% 1.11% 0.97% 40% 30% 0.50% 0.33% 0.39% 0.29% 0.28% 20% 10% 0.00% FY-08 FY-09 FY-10 FY-11 FY-12 Gross NPA Net NPA 0% FY-08 FY-09 FY-10 FY-11 FY-12 48 48
Asset Quality (Amount in ` crore) Change in Gross NPA & Net NPA Year ended 31/03/2012 Year ended 31/03/2011 Gross NPA 267 230 Gross NPA (%) 0.97% 1.11% Net NPA 76 61 Net NPA (%) 0.28% 0.29% Provision Coverage Ratio (%) 71.36% 73.94% Asset Quality maintained at high level. Provision coverage comfortable 49 49
Break-up of Provision Particulars Year ended 31/03/2012 Year ended 31/03/2011 (` in Crore) For NPA advance 21.04 27.74 For Depreciation on Investments 14.07 9.37 For NPA investment -0.69 0.26 For standard assets 39.75 21.60 For income tax 170.69 152.94 For Restructured advances 4.01-0.05 General Provision 0 20 Other impaired assets 2.79 0.84 Other (ADWDRS) -1.80 0 Total Provisions and Contingencies 249.86 232.70 50 50
Performance Highlights (` in Crore) Performance Highlights Year ended Mar-11 Jun-11 Sep-11 Dec-11 Year ended Mar-12 CRAR Basel 2 (%) 14.01% 13.51% 13.48% 12.03% 14.00% Return on Assets (Annualised) 1.05% 1.02% 1.05% 1.06% 1.12% NIM (%) 3.10% 2.80% 3.00% 3.05% 3.10% Gross NPA's 230 236 230 234 267 Net NPA 60 63 58 58 76 Gross NPA (%) 1.11% 1.07% 0.99% 0.94% 0.97% Net NPA (%) 0.29% 0.29% 0.25% 0.24% 0.28% Provision Coverage 73.64% 73.15% 74.70% 75.18% 71.36% CASA 6404 6790 7038 7280 7179 CASA % 21.55% 21.47% 21.30% 21.51% 19.67% Deposits 29721 31622 33038 33834 36501 Advances 20799 22151 23348 25050 27635 Yield on advances 10.90% 11.75% 12.11% 12.30% 12.50% 51 51
FUTURE STRATEGY 52
Way Forward 1 Enhancing income from Technology products, Treasury, Forex and gold coins 2 Ramping up low cost as well as retail liabilities franchise 3 Enhancing productivity per branch/per employee 53 53
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 54
IMPORTANT NOTICE No representation or warranty, express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. The information contained in this presentation is only current as of its date. Certain statements made in this presentation may not be based on historical information or facts and may be forward looking statements, including those relating to the Company s general business plans and strategy, its future financial condition and growth prospects, and future developments in its industry and its competitive and regulatory environment. Actual results may differ materially from these forwardlooking statements due to a number of factors, including future changes or developments in the Company s business, its competitive environment and political, economic, legal and social conditions in India. This communication is for general information purpose only, without regard to specific objectives, financial situations and needs of any particular person. This presentation does not constitute an offer or invitation to purchase or subscribe for any shares in the Company and neither any part of it shall form the basis of or be relied upon in connection with any contract or commitment Important Notice whatsoever. The Company may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such revision or changes. This presentation can not be copied and/or disseminated in any manner. 55 55
THANK YOU 56