South Indian Bank posts impressive 18% growth in Q2 FY 2024-25 net profit

South Indian Bank has announced a remarkable 18.15% increase in its net profit for the second quarter of the financial year 2024-25, posting a net profit of ₹324.69 crore. This figure marks a significant rise from the ₹274.81 crore recorded during the same period last year, showcasing the bank’s successful strategic measures. The latest results, released on 16th October 2024, were presented in compliance with the Securities and Exchange Board of India (SEBI) regulations.

Performance Highlights

In its press release, the Kerala-based private sector bank highlighted its notable progress across various metrics. The operating profit surged by 19.51%, reaching ₹550.25 crore from the ₹460.44 crore reported in Q2 FY 2023-24. Additionally, net interest income rose to ₹882.28 crore, reflecting a 6.22% year-on-year growth. Non-interest income demonstrated an even stronger performance, growing by 26.34% to ₹449.47 crore.

The bank also reported a reduction in both its gross and net Non-Performing Assets (NPAs), with gross NPA dropping from 4.96% to 4.40% and net NPA declining from 1.70% to 1.31% year-on-year. This improvement signifies the bank’s focused efforts in maintaining asset quality and reducing risk.

Advances and Deposit Growth

South Indian Bank’s gross advances witnessed an impressive rise, increasing by ₹9,767 crore or 13.03% year-on-year, bringing the total to ₹84,714 crore. The corporate segment alone saw a jump of 23.54%, adding ₹6,470 crore to the portfolio. The retail segment continued to perform well, with the gold loan portfolio and housing loans registering growth rates of 10.74% and 41.94%, respectively.

The deposit growth was equally robust, with total deposits climbing by 8.62% to reach ₹1,05,451 crore. The retail deposit base expanded by 8.78%, while Non-Resident Indian (NRI) deposits grew by 5.92%. The Current Account Savings Account (CASA) ratio, a key indicator of financial stability, rose by 7.81%.

Expert Opinion: Strategic Focus Paying Off

P R Seshadri, Managing Director and CEO of South Indian Bank, attributed the strong performance to the bank’s strategy, which emphasises quality credit growth. He noted that the focus on onboarding fresh advances with low-risk profiles has proven effective, particularly in segments like corporate, housing, auto, personal, and gold loans.

The bank’s capital adequacy ratio also saw a significant improvement, reaching 18.04% in September 2024 compared to 16.69% in September 2023, further demonstrating the institution’s solid financial footing. South Indian Bank’s progress aligns with its “Vision 2025” strategy, centred on six pillars: Capital, CASA, Cost-to-income, Competency Building, Customer Focus, and Compliance.

Stock Market Sentiment

South Indian Bank’s shares, listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), have reacted positively following the announcement. As investors absorb the latest results, market sentiment remains optimistic, reflecting confidence in the bank’s ability to sustain its growth trajectory.