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ICICI Securities Report
South Indian Bank Ltd.'s Q1 FY23 financial performance continued to improve for the second consecutive quarter with advances growth at 5% QoQ, cost / income ratio down 100 basis points QoQ to 63%, and credit cost settling much lower at 1%.
However, return on asset remained subdued at 0.5%. Steady improvement in current accounts and savings account ratio to 34% versus 30.4% in Q1 FY22, and bulk-deposits down 63% YoY, reflect South Indian Bank’s liability strength.
While asset quality continued to improve for five straight quarters, net-non-performing loans remained elevated at 2.9%. Corporate advances grew by a strong 31% YoY versus total advances growth of 11% YoY as management opted to deploy excess liquidity in credit products rather than park it in G-Sec or similar lower-yielding instruments.
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