South Indian Bank Q3 Results Review - One-Off Provision Marred Earnings: ICICI Securities

ICICI Securities Report

South Indian Bank Ltd., post the onboarding of new Managing Director in Sep-20, continues to deliver in line with its Vision 2025 programme. It focused on growing the balance sheet in a calibrated manner with emphasis on net interest margins and asset quality.

It has since churned ~54% of the overall loan book and operating metrics in the new book (originated post Sep-20) is at par with, or better than, peers.

Gross non-performing loan in the new book stood at 0.06% with special mention account-II of 0.22%. Notably, South Indian Bank delivered an average return on asset of 0.80% during the past four quarters with provision coverage ratio (excluding write-offs) improving to 60% versus 48% in Q3 FY22.

While Q3 FY23 reported earnings (down more than 50% QoQ) were marred by a one-off provision towards security receipts (Rs 3.1 billion), improving trend in core operating performance continued.

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