South Indian Bank (SIB), a Kerala-based mid-sized listed company, is eying 50 per cent growth in fee income over three years to increase its net profit. In pursuit of this, the bank will increase corporate banking operations by setting up dedicated corporate banking facilities in major cities, said managing director and chief executive officer VA Joseph. SIB will also sell third-party life and general insurance products and gold coins to increase fee-based income.

According to Joseph, SIB’s fee income for the year ended March accounted for 20 per cent of total income and there was scope to increase it to 30 per cent in three years. For the September quarter, SIB had seen its net interest margin rise.

The corporate banking branches will come up in Mumbai, New Delhi, Kolkata, Chennai, Bangalore and Hyderabad, he said, adding that each branch could lend about Rs 1,000 crore in times to come. This, in turn, would increase fee income.

SIB on Monday opened 15 new branches around Hyderabad. Lack of aggressive corporate lending was one of the reasons for low fee income now, Joseph said, adding that high costs involved in branch expansion was one of the reasons behind rising operating expenses.

However, employee costs are likely to come down as about 1,000 senior officials are likely to retire this year and the vacant posts will be filled with new talents. SIB has now set a target of Rs 100,000 crore business, 8,000 employees and 800 branches and ATMs by March 2014. It has 5,600 employees at present.

SIB will pursue the Rs 1,000 crore QIP plan after some improvement in the stock market. It has a capital adequacy of 14 per cent and would be able to maintain it at that level due to the profits during the financial year. It hoped to maintain the net interest margin around three per cent notwithstanding a marginal drop in current and savings account (Casa) deposits.