South Indian Bank reports record-breaking Rs 342cr net profit in Q3 FY25

South Indian Bank, a leading private sector bank based in Kerala, has achieved its highest-ever quarterly net profit of ₹342 crore for the third quarter of FY25. This remarkable 11.96% year-on-year growth compared to ₹305.36 crore in Q3 FY24 highlights the bank’s commitment to quality credit growth and operational excellence. The performance aligns with its strategic vision to strengthen profitability through sustainable practices and diversified portfolios.

What Are the Key Drivers Behind South Indian Bank’s Record Profit?

The bank’s financial performance in Q3 FY25 was underpinned by robust growth across critical financial metrics, including higher advances, improved asset quality, and enhanced deposit mobilisation.

• Operating Profit Growth: South Indian Bank recorded a 9.39% rise in operating profit to ₹528.84 crore, compared to ₹483.45 crore in the same period last year. This increase reflects stronger cost management and effective revenue generation strategies.
• Net Interest Income (NII): NII climbed by 6.13% year-on-year to ₹869.26 crore, showcasing the bank’s ability to generate higher returns on its core lending operations.
• Improved Asset Quality: Gross non-performing assets (NPA) reduced by 44 basis points to 4.30%, while net NPA dropped by 36 basis points to 1.25%. These improvements signal the bank’s effective risk management and focus on low-risk advances.

How Did South Indian Bank Achieve Growth in Advances and Deposits?

South Indian Bank’s total advances surged by ₹9,280 crore year-on-year, marking an 11.95% growth to ₹86,966 crore. This robust performance was driven by strategic growth across key lending segments:

• Corporate Lending: The corporate loan book expanded by 16.94%, adding ₹5,064 crore to reach ₹34,956 crore.
• Housing Loans: This segment witnessed exceptional growth, rising 63.9% year-on-year to ₹8,195 crore, reflecting strong demand and attractive lending rates.
• Gold Loans: A ₹1,597 crore increase boosted the gold loan portfolio to ₹16,966 crore, demonstrating the bank’s strong position in this segment.

Deposits also recorded significant growth, with retail deposits rising by 7.71% year-on-year to ₹1,02,420 crore. Non-resident Indian (NRI) deposits grew by 6.49% to ₹31,132 crore, while the current account and savings account (CASA) base expanded by 4.13% to ₹32,830 crore, bolstering the bank’s liquidity and funding stability.

What Role Did Strategy Play in South Indian Bank’s Success?

According to Managing Director and CEO P.R. Seshadri, the bank’s performance stems from its strategic focus on profitability through quality credit growth. This approach has enabled the bank to onboard fresh advances with a low-risk profile while maintaining a sharp focus on compliance and customer satisfaction.

“Our growth in desired segments, such as housing, corporate, and gold loans, highlights the success of our strategy to prioritise quality assets,” Seshadri said.

South Indian Bank’s Vision 2025 framework has further contributed to its success by emphasising six core pillars: Capital, CASA, Cost-to-Income, Competency Building, Customer Focus, and Compliance.

What Is South Indian Bank’s Long-Term Outlook?

South Indian Bank’s capital adequacy ratio stood at a robust 18.00% as of December 2024, compared to 15.60% in the previous year. This improvement reflects the bank’s strong capital base and ability to support future growth.

The bank continues to leverage its technological capabilities, with its digital banking initiatives playing a pivotal role in enhancing customer experience and operational efficiency. With a nationwide network of 950 branches, 1,154 ATMs, and a presence in Dubai through a representative office, South Indian Bank is well-positioned to sustain its growth trajectory.

Why Is South Indian Bank’s Q3 Performance Significant?

The bank’s record-breaking quarterly profit underscores its resilience and adaptability in an increasingly competitive banking sector. By focusing on strategic growth areas, improving asset quality, and maintaining a strong capital base, South Indian Bank has set a benchmark for sustainable profitability.