South Indian Bank net profit up 10-fold in Q1, asset quality improves

In Q1, South Indian Bank's gross advances saw a growth of 10.95 per cent compared to the same period last financial year

South Indian Bank (SIB) on Tuesday announced a ten-fold rise in net profit for the first quarter of the financial year 2022-23 (FY23) to Rs 115 crore. That is compared to Rs 10 crore during Q1FY22.

“Many parameters, starting with CASA, deposits and some segments of the advances have shown good numbers, which resulted in a higher net profit,” said Murali Ramakrishnan, managing director and chief executive officer of the Thrissur-based lender. In Q1FY23, the bank’s CASA grew by 17.92 per cent on a Y-o-Y basis. Deposits and current deposits by 18.12 per cent and 16.86 per cent

In Q1, gross advances saw a growth of 10.95 per cent compared to the same period last financial year. While the corporate segment was seen up by 30.76 per cent, auto loans were up by 30.93 per cent, personal loan book grew by 210.42 per cent and gold loan portfolio up by 27.73 per cent. The bank has reported a total income of Rs 1,868 crore during the quarter ended on June 30 this year, down 10.4 per cent as compared to Rs 2,084.39 crore during the same period last fiscal.

Asset quality improved with gross non-performing assets (GNPA) seen at around 5.87 per cent of gross advances during the April to June quarter of 2022-23 as compared to 8.02 per cent during the first quarter of 2021-22. Similarly, the net NPA was also seen down at 2.87 per cent of gross advances during the quarter as against 5.05 per cent in Q1 last year.

The bank is targeting a double-digit growth in advances this financial year, compared to FY22. “CASA is at present around 34 per cent, our goal is to take it to 36 per cent by the end of the year. My GNPA is at 5.8 per cent level and we want to bring it closer to 5 per cent level. Net NPA is currently around 2.87 per cent, we want to bring it below 2 per cent for the financial year,” said Ramakrishnan.

During the quarter under review, the bank’s return on assets increased by 42.45 bps from 0.04 per cent to 0.46 per cent on a year-on-year basis. SIB’s net interest margin (NIM) improved from 2.55 per cent to 2.74 per cent during the period under review. Its capital adequacy ratio also improved from 15.47 per cent to 16.25 per cent. Similarly, provision coverage ratio improved from 60.11 per cent to 70.11 per cent.