South Indian Bank (SIB) is on the path of recovery despite reporting a net loss of Rs 50.31 crore for the third quarter, says Murali Ramakrishnan, managing director & chief executive officer. He tells Rajesh Ravi in an interview that the bank managed to contain fresh slippages and make higher recovery and upgradation. Excerpts:

How do you review the third quarter?
We have provided additional Rs 43 crore to improve the provision coverage ratio from 65.02% to 68.08%. But for it, our net loss would have been Rs 18 crore. We have managed to reduce the net loss when compared to Rs 91.62 crore in Q3 of FY21 and Rs 187.06 crore in Q2 of FY22. In all the areas of assets and liabilities, we are showing improvement year-on-year and quarter-on-quarter. Our fresh slippages for the quarter is Rs 380 crore, much below the anticipated Rs 400-450 crore.

What is your outlook on total slippages and collection for the fiscal, given that the bank could contain slippages during the third quarter?
Earlier I was expecting slippages to be as bad as last year around Rs 2,300-2,500 crore. But we could contain slippages in the third quarter and we hope to contain it further in the fourth quarter. In the last fifteen months, there is negligible delinquency in the book we have created. We could make a robust recovery and upgradation in NPA accounts amounting to 896 crore in nine months, compared to218 crore during the corresponding period of previous year and Rs 600 crore for the entire fiscal. I am hoping to end this fiscal with a recovery of Rs 1,200 crore.

Do you anticipate any stress in the market?
The third wave has just started and every state is getting impacted. There is stress in the market and definitely the third wave is going to come in the way of collection and business. The stress will get reflected in the book of all the lenders.

What is your outlook on the gold loan portfolio ?
Our gold loan book has grown 12% year-on-year in the third quarter and we are expecting it to grow further. Our total gold loan portfolio for the December quarter stands at Rs 10,147 crore as against Rs 9,737 crore in the September quarter. It is 17% of my total advances.

What about net interest income (NII) and net interest margin (NIM)?
Net interest income has grown to Rs 596 crore for the third quarter of FY22 from Rs 542 crore in the preceding second quarter. NIM for the third quarter stands higher at 2.62%.

From which sector do you see growth in the asset side?
We will be churning out better quality corporate book. We also expect growth in the personal loan, SME and gold loan book. Personal loan is also a good business for us and we are disbursing Rs 75-90 crore every month.

How is the response to the credit card?
We have issued more than 20,000 cards so far and the card book size is now Rs 50 crore. By March-end I am expecting card issuance to touch 35,000.