Earnings Review
South Indian Bk Jul-Sept PAT up 18%, but provisions double
This story was originally published at 18:31 IST on 16 October 2024
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--South Indian Bank Jul-Sept net profit INR 3.25 bln
--South Indian Bank Jul-Sept net profit INR 3.25 bln vs INR 2.75 bln year ago
--South Indian Bank Jul-Sept total income INR 28.04 bln vs INR 24.85 bln
--South Indian Bank Apr-Sept total income INR 55.40 bln vs INR 48.71 bln
--South Indian Bank Apr-Sept net profit INR 6.19 bln vs INR 4.77 bln yr ago
--South Indian Bank Basel III capital adequacy ratio 18.04% as on Sept 30
--South Indian Bank Jul-Sept provisions INR 1.1 bln vs INR 512.5 mln yr ago
--South Indian Bank net NPA ratio 1.31% as on Sept 30 vs 1.44% qtr ago
--South Indian Bank gross NPA ratio 4.40% as on Sept. 30 vs 4.50% qtr ago
--South Indian Bank gross loans INR 847.14 bln Sept. 30, up 13% on yr
--South Indian Bank total deposits INR 1.05 tln Sept. 30, up 8.6% on yr
--South Indian Bank current, savings account ratio 31.80% as on Sept. 30
--South Indian Bank Jul-Sept NII INR 8.82 bln, up 6.2% on year
--South Indian Bk provision coverage ratio including write off 80.72% Sept 30
--South Indian Bk: Personal loan book at INR 22.97 bln Sept 30, up 9.02% YoY
--South Indian Bk: Gold loan book at INR 166.09 bln Sept 30, up 10.7% YoY
By Pratiksha
NEW DELHI – South Indian Bank Ltd.'s net profit for the quarter ended September rose 18.2% on year to INR 3.25 billion even though its provisions and contingencies more than doubled from a year ago, the lender's quarterly results released Wednesday showed. According to the results, the Kerala-based bank's provisions and contingencies rose 115% on year to INR 1.10 billion in the reporting quarter.
The net profit of the bank for the quarter was seen in the range of INR 2.56-2.96 billion, according to the estimates of two brokerages. As such, the above-view profit led to its shares ending 6.6% higher on Wednesday from Tuesday's close at INR 25.52 on the National Stock Exchange.
Floods in parts of south India had led to a sharp rise in provisions for southern-focussed banks this year. In Apr-Jun, South Indian Bank's provisions had jumped up to INR 1.13 billion from INR 0.41 billion in Jan-Mar. In terms of asset quality, the bank's gross non-performing asset ratio declined to 4.40% as on Sept. 30 from 4.50% as at the end of Apr-Jun, while the net non-performing asset ratio fell to 1.31% from 1.44% as on Jun. 30. The lender's provision coverage ratio, including write-offs, rose to 80.72% from 77.82% as on Sept. 30, 2023.
In Jul-Sept, South Indian Bank provided INR 1.48 billion for bad loans, up from INR 1.20 billion in Apr-Jun and INR 0.70 billion a year ago.
The bank's net interest income--the difference between interest earned and expended--for the quarter rose 6.2% on year to INR 8.82 billion, with advances rising 13.0% as on Sept. 30 to INR 847.14 billion. Analysts were expecting the net interest income to be between INR 8.73 billion and INR 8.77 billion. Also supporting the bank's bottom line was other income, which jumped 26.3% on year to INR 4.49 billion in the reporting quarter on the back of a near-tripling of treasury and foreign exchange income to INR 1.06 billion, while core fee income rose robustly by 38% to INR 2.34 billion.
Within loans, housing loans rose at the fastest pace, posting an year-on-year increase of 41.9%, albeit on a low base of just INR 70.72 billion. Corporate advances grew 23.5% to INR 339.61 billion, while personal loans were up 9.0% at INR 22.97 billion. Gold loans, meanwhile, rose 10.7% to INR 166.09 billion as on Sept. 30. Net interest margin for the quarter was 3.24%, broadly unchanged from 3.26% in Apr-Jun, but slightly lower than 3.31% in Jul-Sept 2023.
P.R. Seshadri, managing director and chief executive officer, was quoted as having said in a press release that the bank could on board "fresh advances with low risk profile" going ahead.
On the liability front, South Indian Bank's deposits were up 8.6% at INR 1.05 trillion as on Sept. 30, with retail deposits growing 8.8% to INR 1.02 trillion. The bank's current account, savings account ratio, however, edged down to 31.80% from 32.06% at the end of the previous quarter and 3.03% a year ago. End
Edited by Manisha Baxla
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