Menu

South India Bank Ltd Company overview

  • Home>
  • South India Bank Ltd Company overview
Visteon Invests $10M in India's Camera Manufacturing!
Equities, Markets, Research, Research Reports, Result Updates - October 17, 2024

South Indian Bank Q2FY25: Strong Profit, NIMs Contract, Asset Quality Improves

South Indian Bank Q2FY25: Strong Profit, NIMs Contract, Asset Quality Improves

NII Moderate; Strong Profitability; NIMs contract; Asset quality improved

About the Stock
➡️South indian bank is private sector bank operate in south region of India headquartered in Kerala. The bank has 955 branch network and majority situated in south India. The customer bas has increased from 7.3 Mn to 7.8 Mn within one year period. The bank loan book is well diversified 40% with corporate and remaining 60% retail book includes personals, agri and business.

Strong growth in Advances and Disbursement in Q2FY25
➡️The bank has reported strong growth annually in key business parameter. Gross Advances grew 13% YoY to 84,714 Cr, with corporate segment contributing 40% of the loan book, growing at 24% and personal segment contribute 25%, growing at same pace 24% while business loan and Agriculture contribute 15% and 20% respectively. Disbursement grew 77% YoY to 76,872 Cr led by corporates book. While the bank deposit lagging behind, increased by 9% YoY and borrowings decline 56% YoY. The CASA stand at 31.8% in Q2FY25 lower by 8 bps YoY.
➡️Personal segment loan book driven by growth in mortgage loan at 75% followed by home loan loan at 42%, gold loan 11%, auto loan 18% and credit card 37%.
➡️Retail disbursement momentum help by home loan, auto loan while agriculture and personal loan remains flat annually.

NII growth moderate while PAT jump 18% led by other income and lower tax
➡️Interest income increased by 11% YoY (+2% QoQ) to 2,355 Cr driven by yield expansion and advance growth. The yield on loan expand 19 bps YoY to 7.68% while Cost of fund jump 23 bps to 4.80% result contraction in NIMs. NII grew moderate at 6% YoY (+2% QoQ) to 882 Cr due to high expansion in CoF makes contract NIMs by 7 bps. The bank’s PAT surged 18% YoY (+10% QoQ) to 325 Cr led by higher other income and lower tax expense despite the jump in credit cost. The stable the employee cost and total operating cost kick in operating leverage and boost the profitability.

Asset quality enhanced; stress book reduce
➡️Company has reduced the stress assets from 1,159 Cr in Q2FY24 to 476 Cr in Q2FY25. Bank has churned 75% of overall loan book since covid level and 93% current GNPA from old book. GNPA/NNPA stood at 4.40%/1.31% decline by 56bps/39 bps YoY (10bps/13 bps QoQ). Slippages ratio decline to 0.36% in Q2FY25 vs 0.42% in Q2FY24. The provision coverage ratio expand 290 bps YoY to 80.7% vs 77.8% in Q2FY24.

Valuation and Key metrics
➡️Currently the stock is trading at 0.76 price to book value. The yield on advances jump 19 bps to 7.68% while CoF decline by 23 bps YoY to 4.80%. This result in contraction in NIMs by 7 bps to 3.24%. The increased in deposit rate to maintain and increased the deposit growth led to higher CoF and contract NIMs as Yield is stable.

The image added is for representation purposes only

TCS Unveils Pace Studio in Philippines to Boost Digital Innovation

, , , 0 Comment
Read More
HUDCO Q3FY25 Results Update: Robust Performance Drives Strong Growth
Research, Research Reports, Result Updates - August 23, 2024

South Indian Bank's Q1FY25: Steady Growth Amid Slight NIM Decline

South Indian Bank’s Q1FY25: Steady Growth Amid Slight NIM Decline

About the Stock:

South Indian Bank which began in 1929 has headquartered in Thrissur, Kerala, is a private sector bank in India. The bank has a significant presence in South India, especially in Kerala, but it also operates branches across the country. Known for its customer-centric approach, South Indian Bank emphasizes digital banking solutions, aiming to cater to both urban and rural populations. Despite challenges in the competitive banking sector, the bank continues to focus on growth through innovation and customer service excellence.

Q1FY25 Performance Analysis:

The total business of the company witnessed a significant growth of 10%, increasing from INR 1,69,601 crore in Q1FY24 to INR 1,86,112 crore in Q1FY25. This growth reflects the company’s successful expansion strategies and increased market penetration over the year.

Gross advances in Q1FY25 increased by 11%, reaching INR 82,580 crore, compared to Q1FY24 which is INR 74,102 crore. This rise indicates enhanced lending activity and a positive response from the credit market, showcasing the institution’s ability to deploy funds effectively.

Retail deposits saw an 8% increase, rising from INR 92,043 crore in Q1FY24 to INR 99,745 crore in Q1FY25. This indicates growing consumer trust and an expanding depositor base, which is critical for maintaining liquidity and funding future growth.

The CASA ratio slightly increased by 7%, from INR 31,166 crore (32.64%) in Q1FY24 to INR 33,195 crore (32.06%) in Q1FY25. Although the CASA ratio grew, the percentage of total deposits in CASA marginally decreased, suggesting a shift towards term deposits.

There was a remarkable 51% increase in disbursements, from INR 22,108 crore in Q1FY24 to INR 33,482 crore in Q1FY25. This substantial growth highlights the institution’s aggressive lending practices and strong demand for credit in the market. Net Interest Income (NII) has seen steady growth, reaching INR 866 crore in Q1FY25, while the Profit after Tax (PAT) was INR 294 crore, indicating consistent profitability.

Profit & Loss Statement Overview:

Particulars Q1FY25

(INR in Cr.)

 Q4FY24

(INR in Cr.)

 QoQ

(%)
Net Interest Income 866 875 -1%
Non-Interest Income 422 346 22%
Total Income 1,288 1,221 5%
Operating Expenses 780 787 -1%
Operating Profit 508 434 17%
Provisions & Contingencies 113 41 176%
Profit Before Tax 395 393 1%
Provision for Tax 101 105 -4%
Profit After Tax 294 288 2%

The Net Interest Margin slightly decreased by 8 basis points, from 3.34% in Q1FY24 to 3.26% in Q1FY25. This decline could be due to rising interest costs or competitive pressures in the lending market. CRAR showed a solid improvement, increasing by 162 basis points to reach 18.11% in Q1FY25, compared to 16.49% in Q1FY24. This showcases the company’s ability to absorb losses and ensure a Financial Stability.

Gross NPA Movement:

Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q1FY25
Opening 3,708 3,804 3,714 3,682 3,620
Additions 487 315 306 289 346
Deductions 391 405 337 351 246
Closing 3,804 3,714 3,682 3,620 3,720

 

Net NPA Movement:

Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q1FY25
Opening 1,294 1,326 1,234 1,212 1,135
Additions 336 207 185 211 250
Deductions 304 298 207 289 232
Closing 1,326 1,234 1,212 1,135 1,153

The GNPA in Q1FY25 is 4.50% which is reduction from 5.13% in Q1FY24. Similarly, the Net Non-Performing Assets (NNPA) decreased from 1.85% to 1.44%. The good asset quality and effective recovery processes is the reason behind it. Overall, the company has demonstrated strong financial performance, marked by growth in business volume, improved asset quality, and consistent profitability. The slight dip in NIM is a point of attention, but overall, the institution appears well-positioned for continued growth.

The image added is for representation purposes only

Neogen Chemicals Boosts Q1 FY25 Profit to INR 11.5 Cr, Lithium Sales Shine

, , , 0 Comment
Read More
Flexiloans Bags ₹375 Cr in Series C, Targets ₹5,000 Cr AUM Within 18 Months
Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - October 3, 2023

South India Bank Ltd's report robust PAT up 75.42% YoY 

South India Bank Ltd’s report robust PAT up 75.42% YoY 

Company Overview:

South India Bank, established in 1929 in Kerala, holds the distinction of being the earliest bank in South India. It primarily operates in Kerala and the southern regions of India, with plans for further expansion nationwide. The bank offers lending facilities at competitive rates to retail individuals and businesses, catering to various sectors, including corporations, personal, business, and agriculture. Additionally, it engages in para-banking activities such as debit card services, third-party financial product distribution, treasury operations, and foreign exchange transactions.

Branch Network:

As of June 2023, South India Bank boasts an extensive branch network of 941, inclusive of 3 satellite branches and 3 ultra-small branches, complemented by 1,296 ATMs spanning the country. Notably, a significant 82% of its branches are concentrated in Kerala and the southern region, posing geographic concentration risks. The majority of these branches, approximately 50%, are located in semi-urban areas. With an employee base of 9,894, the bank aims to enhance its presence with the opening of 17 banking outlets and 25 ATMs, along with 10 cash recycling machines in the financial year 2023-24.

Loan Book Concentration:

In Q1FY24, the bank’s loan book exhibits a notable concentration in the southern region of India, with 36% of loans sanctioned in Kerala and 35% in the southern states excluding Kerala, collectively forming 72% of the loan portfolio. The remaining 28% of loans are disbursed in the rest of India. The loan book is diversified among segments, with corporate loans accounting for 37%, personal loans at 23%, business loans making up 21%, and agriculture loans comprising 19% of the portfolio.

Segment-wise Performance in Q1FY24:

South India Bank’s gold loan book witnessed consistent growth, increasing by 21.04% YoY, primarily driven by retail and agriculture sub-segments. The personal loan segment expanded by 12.18% YoY, primarily attributed to housing loans. In contrast, business loans decreased by 14.57% YoY due to declines in MSME/SME and other loans. Corporate loans exhibited robust performance, growing by 47.94% YoY in Q1FY24, with a significant portion comprising AAA-rated and AA-rated companies.

Assets Quality and Capital Adequacy:

The bank’s asset quality improved in Q1FY24, with GNPA at 5.13% compared to 5.87% in the previous year and NNPA at 1.85% compared to 2.87%. South India Bank maintains a capital adequacy ratio of 16.49%, exceeding the RBI’s guideline of 15%. The provision coverage ratio increased to 76.54% from 70.11% in Q1FY23.

Valuation and Key Ratios:

Currently trading at 0.82 times its book value of 31.9 Rs per share, the bank exhibits improved financial metrics, with ROA and ROE at 0.73% and 11.80%, respectively. Net Interest Margins (NIMs) increased to 3.34% in Q1FY24, up 60 bps from 2.74% in Q1FY23. However, the CASA ratio declined to 32.64% from 34.4% in Q1FY23, and the cost-to-income ratio, while slightly high at 58%, improved from 62.7% in the previous year.

Q1FY24 Results Update: Consolidated

In Q1FY24, the bank reported impressive financials, with interest income growing by 24.86% YoY, resulting in net interest income of 807.77 Cr, a 33.87% YoY increase. Notable improvements were seen in corporate and personal segments. NIMs increased to 3.34% compared to 2.74% in Q1FY23. Pre-provision operating profit (PPOP) grew by 54.77% YoY. Profit after tax (PAT) recorded a significant 75.42% YoY growth to 202.5 Cr, with an earnings per share (EPS) of 0.97 Rs for the quarter. The collection efficiency also improved to 100.1% in Q1FY24 compared to 99.8% in the previous quarter.

Conclusions:

South India Bank demonstrates a strong regional presence, particularly in Kerala and the southern regions of India. The bank’s diversified loan portfolio, improving asset quality, and capital adequacy ratios above regulatory requirements indicate a positive outlook. Despite some challenges like geographic concentration and a slight decline in CASA, the bank’s performance in Q1FY24 showcases growth potential, especially in the corporate and personal segments.

 

Astral Pipes posted a net profit of Rs. 96 Cr.

 

, , , , , 0 Comment
Read More