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South Indian Bank has posted net profit of Rs 6.79 crore in the quarter ended March 2021 (Q4FY2021), compared with net loss of Rs 91.62 crore in Q3FY2021 and Rs 143.69 crore in Q4FY2020. The bank has posted 6% decline in the net interest income (NII) and credit cost increased and remained elevated at 3.1% in Q4FY2021.
The loan book of bank has declined 9%, while credit-deposit ratio dipped to 71.8% leading to 6% decline in the NII. The cost-to-income ratio of the bank eased on sequential basis to 55.5% in Q4FY2021 from 56.4% in Q3FY2021, but jumped from 46.1% in Q4FY2020.
The advances book of the bank has declined 9% end March 2021. On liabilities front, the bank has exhibited sharp improvement in CASA deposits ratio at 29.7% end March 2021.
Asset quality weakens: Asset quality of the bank has remained under pressure with increase in net NPA ratios in Q4FY2021.
Fresh slippages of advances jumped to Rs 2123 crore in Q4FY2021, which includes proforma slippages of Rs 1379 crore as of end December 2020.
The recoveries and upgradations and write-offs stood at Rs 1083 crore in Q4FY2021.
The standard restructured advances book of the bank rose to Rs 1277 crore at end March 2021 from Rs 1145 crore end December 2020.
The securities receipt book of the bank stood at Rs 1122.55 crore with provisions of Rs 634.09 crore end March 2021.
Provision coverage ratio jumped to 58.73% end March 2021.
The risk weighted assets of the bank declined to Rs 47167.5 crore end March 2021 from Rs 49621 crore end December 2020.
Asset Quality Indicators: South Indian Bank
|
Mar-21 |
Dec-20 |
Sep-20 |
Jun-20 |
Mar-20 |
Variation |
| QoQ |
YoY |
| Gross NPA (Rs Crore) |
4143.24 |
3103.45 |
3182.16 |
3245.44 |
3261.77 |
34 |
27 |
| Net NPA (Rs Crore) |
2734.52 |
1305.03 |
1655.39 |
1992.86 |
2150.78 |
110 |
27 |
| % Gross NPA |
6.97 |
4.90 |
4.87 |
4.93 |
4.98 |
207 |
199 |
| % Net NPA |
4.71 |
2.12 |
2.59 |
3.09 |
3.34 |
259 |
137 |
| % PCR |
58.73 |
72.03 |
65.20 |
58.80 |
54.20 |
-1330 |
453 |
| % CRAR - Basel III |
15.42 |
14.47 |
13.94 |
13.49 |
13.41 |
95 |
201 |
| % CRAR - Tier I - Basel III |
12.80 |
11.60 |
11.20 |
10.80 |
10.80 |
120 |
200 |
| Variation in basis points for figures given in percentages and in % for figures in Rs crore |
Business Highlights:
Business volume declines: Business volumes of the bank declined 4% yoy at Rs 142129 crore at end March 2021 over March 2020. The moderation in business growth was driven by 9% dip in advances to Rs 59418 crore at end March 2021. The deposits base was flat at Rs 82711 crore at end March 2021. The credit deposit ratio declined to 71.8% from 75.8% a quarter ago and 78.9% a year ago.
CASA ratio improves: CASA deposits of the bank moved up 18% at Rs 24590 crore gaining the share in overall deposits to 29.7% at end March 2021 compared to 27.9% a quarter ago and 25.0% a year ago.
Investment book of the bank declined 1% to Rs 21181 crore end March 2021. The HTM book moved up 5% to Rs 17792 crore, AFS declined 25% to Rs 3373 crore and HFT book stood at Rs 16 crore. The modified duration of the AFS book stood at 0.97 years and overall investment book at 4.19 years.
Network expansion: Bank has network of 884 branches and 1315 ATMs with employee base of 7815 employees at end March 2021.
Book Value per share stood at Rs 26.2 per share at end March 2021, while adjusted Book value (adjusting for NNPA, 10% of restructured advances and estimated restructuring) was at Rs 12.3 per share at end March 2021.
Quarterly Performance:
NII declines on dip in loan book: Bank has reported 6% decline in Net Interest Income (NII) at Rs 560.52 crore for the quarter ended March 2021. The interest earned declined 12% to Rs 1707.77 crore, while interest expenses dipped 15% to Rs 1147.25 crore in the quarter ended March 2021.
Core fee income improves, treasury income declines: The non-interest income of the bank declined 1% to Rs 390 crore in Q4FY2021, as the treasury income declined 33% to Rs 151 crore. However, the core fee income improved 16% to Rs 124 crore in Q4FY2021 and other income jumped 103% to Rs 99 crore, while forex income moved up 33% to Rs 16 crore in Q4FY2021.
Net total income declined 4% to Rs 951.00 crore in the quarter ended March 2021.
Expense ratio rises: The operating expenses of the bank moved up 16% to Rs 528.20 crore in the quarter ended March 2021. The expense ratio rose to 55.5% in the quarter ended March 2021 from 46.1% in Q4FY2020.
The operating profit declined 21% to Rs 422.80 crore in Q4FY2021.
Provisions remains elevated: The provisions and contingencies declined 43% on a high base and remained elevated to Rs 412.29 crore in the quarter under review. The provisions for NPA moved up 100% to Rs 719 crore, while the bank has written back standard assets provisions of Rs 259 crore, investment provisions of Rs 44 crore and other provisions of Rs 3 crore in Q4FY2021.
With the elevated in provisions, the bank has posted marginal profit before tax at Rs 10.51 crore in Q4FY2021.
An effective tax rate was at 35.4%, while the net profit came in at Rs 6.79 crore in the quarter ended March 2021.
Financial Performance FY2021:
For the year ended March 2021 (FY2021), the bank posted 41% dip in the net profit at Rs 61.91 crore. The net interest income rose 4% to Rs 2406.91 crore, while non-interest income moved up 13% to Rs 1185.48 crore in FY2021. The operating expenses increased 15% to Rs 1974.48 crore, while provision and contingencies rose 2% to Rs 1531.25 crore in FY2021. The profit before tax declined 42% to Rs 86.66 crore in FY2021. The expense ratio rose to 55.0% in FY2021 compared to 51.1% in FY2020. After considering 28.6% of effective tax rate down from 30.1% in FY2020, the net profit declined 41% to Rs 61.91 crore in FY2021.
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