South Indian Bank shares soar over 6% after net profit grows 45% YoY in Q1

Shares of South Indian Bank climbed by 6.4%, reaching a one-month peak of ₹28.20 per share, following the release of its Q1FY25 financial results on Thursday. The bank reported a 45.30% increase in standalone net profit, reaching ₹294 crore for the June quarter, compared to ₹202 crore in the same period last year.

Net interest income (NII), which represents the difference between the interest earned from loans and the interest paid to depositors, totaled ₹866 crore in Q1, up from ₹808 crore in the corresponding quarter of the previous year.

The net interest margin for the quarter was 3.26%, slightly down from 3.34% in Q1 FY24. Additionally, other income increased by 16.80% year-on-year, reaching ₹422 crore.

Pre-provision operating profit rose to ₹507.68 crore from ₹490.24 crore year-on-year. Provisions for Q1FY25 were recorded at ₹113 crore, a decrease from ₹199 crore in Q1FY24.

On the asset quality front, the bank's gross non-performing assets (NPAs) declined by 63 basis points year-on-year to 4.50%, while net NPAs fell by 41 basis points year-on-year to 1.44%.

Retail deposits grew by ₹7,702 crore to ₹99,745 crore, reflecting an 8.37% increase year-on-year. Non-resident Indian (NRI) deposits also rose by ₹1,720 crore to ₹29,236 crore, up by 4.55% year-on-year. 

The CASA (Current Account Savings Account) deposits saw a year-on-year growth of 6.51%, with savings accounts increasing by 4.87% and current accounts by 14.80%.

In terms of advances, the corporate segment saw a notable increase of ₹6,462 crore, rising from ₹27,522 crore to ₹33,984 crore, marking a 23.48% year-on-year growth. Additionally, the share of 'A' and above-rated accounts within the large corporate segment improved from 94% to 96% over the same period, according to the bank's earnings report. 

The personal loan portfolio expanded by ₹377 crore, growing from ₹1,935 crore to ₹2,312 crore, which represents a 19.5% increase year-on-year. Similarly, the gold loan portfolio increased by ₹1,839 crore, moving from Rs. 14,478 crore to ₹16,317 crore, reflecting 12.70% year-on-year growth.

The return on equity improved by 110 basis points, rising from 11.80% to 12.90% year-on-year. The return on assets increased by 27 basis points, from 0.73% to 1% year-on-year. Furthermore, the provision coverage ratio, excluding write-offs, rose by 390 basis points, from 65.15% to 69.05% year-on-year.

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