The Thrissur-based South Indian Bank has made a profit of ₹341.87 crore for the October-December quarter, showing an 11.96% increase compared to the same period last year.
The bank's operating profit saw a 9.39% rise, reaching ₹528.84 crore, up from ₹483.45 crore in Q3 FY24. Operating profit represents the profit earned from core business operations, excluding interest and tax expenses. This indicates the bank's efficiency in generating income from its usual activities.
Additionally, total income also witnessed an increase, standing at ₹2,817 crore, compared to ₹2,636.23 crore in the previous year.
On the asset quality front, the bank has made progress in reducing its bad loans. The gross non-performing assets (GNPA) have come down to 4.30% from 4.74%, while net non-performing assets (NNPA) improved to 1.25%, down from 1.61%.
GNPA refers to the total value of loans classified as non-performing, meaning repayments have been overdue for a prolonged period, while NNPA accounts for the portion of GNPA after deducting provisions made by the bank to cover potential losses.
The current account savings account (CASA) ratio, which indicates the proportion of low-cost deposits in the bank's total deposit base, slightly dipped to 31.15%, compared to 31.80% in the previous year.
The bank's gross advances (loans) grew by 11.95%, reaching ₹86,966 crore, driven by growth in key segments. On the deposit front, retail deposits saw a growth of 7.71%, reaching ₹1.02 lakh crore.
Non-resident deposits grew by 6.49%, while savings bank deposits and current account deposits increased by 3.37% and 7.73%, respectively.
The bank's managing director and chief executive, P R Seshadri, said the bank wants to expand the net interest margin (NIM) by changing the mix of loans as it does not see any ease from the cost of funds.
He said the bank will focus on small ticket advances to the micro, small, and medium enterprises, global education loans, and mid-market housing to grow the NIMs going forward. It has some headroom to grow the high-margin personal loan book, but will be circumspect on the same given the overall issues in the sector, he said.
Following the release of the third-quarter results, the bank's stock saw some fluctuations. As of January 22, 2025, the stock was trading at ₹26.81 per share, reflecting the market's mixed reaction to the performance.
Over the past month, the stock has ranged from ₹24.92 to ₹27.25, with the price closing at ₹26.68 on January 16, 2025.