|
South Indian Bank has posted net loss of Rs 91.62 crore in the quarter ended December 2020 (Q3FY2021), driven by 1% decline in the net interest income (NII) and 91% jump in provisions. The loan book of bank has declined 3%, while credit-deposit ratio dipped to 75.8% leading to 1% decline in the NII. The cost-to-income ratio of the bank also moved up to 56.4% in Q3FY2021 from 54.2% in Q2FY2021 and 53.4% in Q3FY2020.
The bank has continued to make higher provisions and sharply raised provision coverage ratio to 72.03% end December 2020 from 65.2% end September 2020. However, the bank has exhibited sharply higher proforma slippages of Rs 1379 crore in the quarter ended December 2020
The advances book of the bank has declined 2%, while the growth for focused retail, agriculture and MSME loan book also moderated to 5% end December 2020. On liabilities front, the bank has exhibited marginally improvement in CASA deposits ratio at 27.9% end December 2020.
Asset quality stable: Asset quality of the bank has remained stable with almost negligible fresh slippages of loans and higher NPA reductions in Q3FY2021.
Fresh slippages of advances dipped to Rs 5 crore in Q3FY2021 from Rs 52 crore in Q2FY2021. The recoveries and upgradations and write-offs stood at Rs 83 crore in Q3FY2021.
The restructured advances book of the bank rose to Rs 1205 crore at end December 2020 from Rs 1104 crore end September 2020. Fresh restructuring of advances stood at Rs 44 crore in Q3FY2021.
The securities receipt book of the bank stood at Rs 1310.89 crore with provisions of Rs 603.95 crore end December 2020.
Provision coverage ratio jumped to 72.03% end December 2020.
The risk weighted assets of the bank declined to Rs 49621 crore end December 2020 from Rs 51359 crore end September 2020.
Business Highlights:
Business volume declines: Business volumes of the bank declined 2% yoy at Rs 146890 crore at end December 2020 over December 2019. The moderation in business growth was driven by 2% decline in deposits to Rs 83537 crore at end December 2020. The advances also dipped 3% yoy at Rs 63353 crore at end December 2020. The credit deposit ratio declined to 75.8% from 79.1% a quarter ago and 77.0% a year ago.
Corporate book dips, growth eases for Retail, agriculture, MSME segments: The corporate book dipped 23% to Rs 15227 crore, while its share in loan book fell to 24.0% end December 2020 from 30.2% end December 2019. The retail loan book growth eases to 4% at Rs 20605 crore, agriculture book moved up 6% to Rs 10365 crore and MSME loan book moved up 7% to Rs 17156 crore end December 2020.
CASA ratio improves: CASA deposits of the bank moved up 9% at Rs 23332 crore gaining the share in overall deposits to 27.9% at end December 2020 compared to 27.8% a quarter ago and 25.2% a year ago.
Investment book of the bank increased 9% to Rs 22967 crore end December 2020. The HTM book moved up 12% to Rs 18719 crore, AFS declined 4% to Rs 4172 crore and HFT book stood at Rs 76 crore. The modified duration of the AFS book stood at 1.4 years and overall investment book at 4.87 years.
Network expansion: Bank has network of 877 branches and 1443 ATMs with employee base of 7759 employees at end December 2020.
Book Value per share stood at Rs 28.8 per share at end December 2020, while adjusted Book value (adjusting for NNPA, 10% of restructured advances and estimates of proforma NPAs and restructuring) was at Rs 17.7 per share at end December 2020.
Quarterly Performance:
NII eases on decline in loan book: Bank has reported 1% decline in Net Interest Income (NII) at Rs 596.39 crore for the quarter ended December 2020. The interest earned declined 8% to Rs 1811.96 crore, while interest expenses dipped 11% to Rs 1215.57 crore in the quarter ended December 2020.
Non-interest income jumps: The non-interest income of the bank surged 23% to Rs 270.12 crore in Q3FY2021, as the treasury income zoomed three-times to Rs 96 crore and forex income moved up 9% to Rs 12 crore. However, the core fee income fell 3% to Rs 104 crore in Q3FY2021 and other income declined 18% to Rs 58 crore in Q3FY2021.
Net total income rose 5% to Rs 866.51 crore in the quarter ended December 2020.
Expense ratio rises: The operating expenses of the bank moved up 11% to Rs 489.05 crore in the quarter ended December 2020. The expense ratio rose to 56.4% in the quarter ended December 2020 from 53.4% in Q3FY2020.
The operating profit declined 1% to Rs 377.46 crore in Q3FY2021.
Provisions surge: The provisions and contingencies increased 91% to Rs 499.48 crore in the quarter under review. The provisions for NPA moved up 40% to Rs 284 crore and standard assets jumped 592% to Rs 166 crore, while investment provisions also doubled to Rs 45 crore in Q3FY2021.
With the rise in provisions, the bank has posted pre-tax loss of Rs 122.02 crore in Q3FY2021.
The bank has written back tax provisions of Rs 30.40 crore, helping to reduce net loss to Rs 91.62 crore in the quarter ended December 2020.
Financial Performance 9MFY2021:
For the nine months ended December 2020 (9MFY2021), the bank posted 78% dip in the net profit at Rs 55.12 crore. The net interest income rose 7% to Rs 1846.39 crore, while non-interest income moved up 22% to Rs 795.00 crore in 9MFY2021. The operating expenses increased 15% to Rs 1446.28 crore, while provision and contingencies moved up 45% to Rs 1118.96 crore in 9MFY2021. The profit before tax declined 78% to Rs 76.15 crore in 9MFY2021. The expense ratio rose to 54.8% in 9MFY2021 compared to 53.1% in 9MFY2020. After considering 27.6% of effective tax rate up from 27.0% in 9MFY2020, the net profit declined 78% to Rs 55.12 crore in 9MFY2021.
|