Moving with the gen-next

INTERVIEW: Dr. V A Joseph, MD & CEO, South Indian Bank

          
 


"Personalised banking service is our strength”, says Dr V A Joseph, MD & CEO, South Indian Bank. Excerpts from the interview

South Indian Bank is one of the earliest private sector banks that commenced operations during the Swadeshi movement in 1929. Headquartered in Trichur, the cultural capital of Kerala, it is the first Kerala based bank to implement a core banking system. It is also the third largest branch network among old generation private sector banks in India with all its branches under core banking system.

As part of the bank’s constant changes to suit the needs of its customers, mega star Mammooty, its brand ambassador, unveiled the new corporate logo of the bank, making it the only bank in South India with a star brand ambassador. In a candid conversation with Sherene Joseph, Dr V A Joseph states that South Indian Bank today has transformed into a modern bank, ready to serve the next generation.

Q: Are you happy with the performance of the bank this year?

Yes, definitely.  In 2005, the net profit was just 8.70 crores . The bank has been showing a consistent performance ever since and today, it has touched a profit of 502.27 crores as on 2013, which is no mean achievement.

Q: How far have you been able to achieve South Indian Bank’s five year business plan- Vision 2013?

Our Vision 2013 was envisioned in 2008, when our total business was only around Rs.26000Cr. We formulated vision 2013 with the aim of achieving a total business of Rs.75000 crore, 750 branches, 750 ATM’s and 7500 employees. As on today, we have achieved the business, opened 809 ATM’s across India and 750 branches. All this has been accomplished with 6400 employees instead of 7500, which is an achievement too. Also, this may be the only bank where the president, vice-presidents and general secretary of the Officers association are all working as branch managers.

Q: What are the focus areas of the bank for the year 2013-14?

The focus next year is a target to achieve one lakh crore business, with 800 branches and 1000 ATM’s pan India. Initially, we were only focusing on Kerala, but now South Indian Bank has expanded in a big way and more than 25000 crore business comes from Delhi, Bombay, Calcutta and Hyderabad branches.

Q: What are the new schemes to attract NRI’s?

NRI schemes are very attractive now without any new schemes due to the high interest rates which are at par with the normal domestic rates. Rupee depreciation has also had a big effect on NRI deposits. NRI’s have hugely benefited firstly from rupee conversion, and second on interest rates, added to these advantages NRE deposits, interest income is exempted from Income Tax.

Q: Any new schemes for the general public?

It is too early to disclose new schemes but the core focus this year is on retail sector, to provide vehicle loans and home loans, at a competitive rate of interest. Also, existing schemes like youth plus for students and women schemes have been greatly appreciated.at present we are having a good current account scheme CD smart. In the similar lines with flexible free limits we shall be launching a SB Product SB Smart.

 

Q: South Indian Bank -VISA debit card tie-up has been a success among the masses. Comment on the same.

We had a Master Card tie-up initially, and VISA card tie-up was also introduced later based on customer demand. It has been well received and now we have launched prepaid travel card for people visiting foreign countries on vacation or any other purpose. The Travel card is issued in Dollar, Pound sterling and Euro and it is very customer friendly for travelers going abroad.

Q: Interest rates are on a decline now. Do you think the decline will continue?

It is related to supply and demand factors. As economy grows, banks grow. There is a demand for loans when the economy is growing and loans grow if the interest rates are low. It is all interconnected. The falling prices of gold and crude oil in the international markets are welcome signs to bring down our inflation rates and interest rates.

Q: What is your take on the Indian economy’s performance in the coming years?

Indian economy is one of the best in the world and there is tremendous scope for the economy to grow, owing to the huge population of the country and the resultant domestic consumption. Growth in the economy depends on various factors like good monsoon, domestic demand, efficiency of the government, global economy, crude oil prices and investments flows from other development countries.

Q: Are there enough opportunities for lending in Kerala?

Except retail loans scope for lending in Kerala is very limited compared to Tamil Nadu and Karnataka. Kerala lacks industries to which banks can lend, apart from tourism, agriculture and trading sector.

Q: NPA (non-performing assets) is a worry for most banks. How is the case with South Indian Bank?

We are not worried because the gross NPA of the banking system is around    3.5% and South Indian bank is less than half of this which we hope to maintain in the coming days. We are very comfortable when compared to the general banking industry.

Q: How different is South Indian Bank from other banks?

What sets us different from other banks is the service provided to customers, young and old. For the last couple of years, we have been recruiting dynamic youngsters for the bank’s operations. For a 84 year old bank like South Indian Bank, the average age of employees stands at 34 today which is unheard of in India. Not many are aware of the share holding pattern in South Indian Bank. Its amazing for a Kerala based old generation private sector bank to have its 46% of shares owned by FII’s and NRI’s. While 44% of the shares is held by foreign institution investors, 2.25% is held by the NRI’s. Remaining shares belong to nearly 2.50 lakh domestic investors.

Q: Do you have any message for the general public?

From an old generation bank the South Indian Bank today has transformed to a modern bank, ready to serve the next generation. We look forward to the continued support and patronage of our customers. We are moving ahead embracing change, with the latest technology, core banking systems in place and consistent performance over the years. The details below are proof of the dividend history for last few years.

Dividend history of SIB 2005-2012
YE.31 March 2013	Dividend %	Profit in Crores
2013	70	502.27
2012	60	401.65
2011	50	292.56
2010	40	233.76
2009	30 + bonus share issued	194.75
2008	30	151.62
2007	25	104.12
2006	18	50

PS:The interview was my first assignment with Times of India, Kochi where I am currently working as Correspondent / Copy Editor. For someone with no background of finance or banking, I did a fair job I guess. It gave me my first byline in 10 yrs and I simply could not hold my excitement!

Published in Economic Times, Kerala