The South Indian Bank (SOUTHBANK) Q4 98/99 earnings summary

Executive summary

• FY99 net profit was Rs 6.08 crore vs Rs 20.74 crore in FY98; profit before depreciation, taxes and provisions was Rs 38.08 crore.

• Weaker credit demand, industrial recession and higher provisions drove actual net profit below the Rs 27.31 crore projection, at Rs 6.08 crore.

Financial highlights

• Total income rose to Rs 436.79 crore from Rs 364.73 crore; interest earned was Rs 399.89 crore vs Rs 338.69 crore and other income was Rs 36.90 crore vs Rs 26.04 crore.

• Interest expense increased to Rs 311.78 crore from Rs 261.45 crore; operating expenses rose to Rs 89.83 crore from Rs 73.37 crore.

• Provisions and contingencies reached Rs 29.10 crore vs Rs 9.16 crore; net profit was Rs 6.08 crore vs Rs 20.74 crore.

Outlook and guidance

• Proposed dividend was 10% tax-free, down from 28% for FY98; shares issued in October 1998 were eligible for proportionate dividend from allotment date.

• RBI planned to raise the minimum capital adequacy ratio from 8% to 9% by March 31, 2000; ALM implementation was underway under RBI guidelines.

• Computerised branches and the administrative office were Y2K compliant, with contingency plans intended to support business continuity.