ICICI Securities research report onSouth Indian Bank
South Indian Bank (SIB) has received RBI approval (link) for the appointment of Mr. Mahesh Pai as MD&CEO for three years. Mr. Pai currently is Chief General Manager (CGM) at Canara Bank (Canara). SIB’s need for new MD&CEO stems from Mr. Seshadri’s, incumbent MD&CEO, decision to refrain from renewing his first term post completion (link). This is reminiscent of Mr. Murali’s, previous MD&CEO, tenure end – serving only a single term (2020–23). Mr. Pai is aged 50 years and has headed one of the largest zones of his current bank. Importantly, he could bring longevity into the MD&CEO role at SIB.
Our positive stance on SIB was predicated on the bank’s ongoing transformation in favour of MSME growth revival, NIM uptick, cost control and superior AQ. Amidst the transition, we now conservatively assign a target multiple of ~0.8x (vs. ~1x); TP at INR 45. Downgrade to HOLD.
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