South Indian Bank Surges with 18% Profit Boost in September Quarter

South Indian Bank reported an 18% increase in net profit for the September quarter, driven by treasury and forex gains. The bank's net interest income grew by 6%, while non-interest income saw a 26% rise. Asset quality improved with gross NPAs at 4.40%, and provisions doubled to bolster coverage.

South Indian Bank announced an 18% boost in its net profit for the September quarter, reaching Rs 325 crore. The impressive rise was attributed largely to gains from treasury and forex activities.

The lender's net interest income climbed 6% to Rs 882 crore, supported by a 13% increase in advances, despite a slight decrease in the net interest margin.

CEO PR Seshadri clarified that the margin impact wasn't due to deposit issues, as funding costs fell sequentially. A decline in T-bill rates, agri loan losses, and challenges with corporate borrowers affected the margins.

During this period, non-interest income surged 26% to Rs 449 crore, with gains from forex and treasury trades more than doubling to Rs 106 crore.

Provisions, intended to raise the provision coverage ratio above 80%, doubled to over Rs 116 crore. Asset quality showed improvement, with gross non-performing assets reduced to 4.40% from the previous year's 4.96%.

Despite stable fresh slippages of Rs 3,731 crore, the bank focused on expanding yields, emphasizing loans against property, credit cards, and home loans, with unsecured loans remaining under control.

Capital adequacy stood at 18.04%, with no plans for reduction, while the workforce decreased due to automation benefits.

Closing the day, the South Indian Bank's share price rose by 6.51% on the BSE, contrasting with a minor decline in the broader market.

(With inputs from agencies.)