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South Indian Bank has posted net loss of Rs 143.69 crore in the quarter ended March 2020 (Q4FY2020), due to one off provisions of Rs 332 core. The bank has created provisions of Rs 255 core on MTM on security receipts and Rs 77 core for Covid 19. Excluding these on-off provisions, the profit would have been Rs 104 core for Q4FY2020.
However, the bank has posted healthy 19% growth in the net interest income, while treasury income jumped with the spurt in treasury income. The bank has exhibited healthy improvement in cost-to-income ratio to 46.1% in Q4FY2020. The Net Interest Margins (NIMs) of the bank increased to 2.67% in Q4FY2020 from 2.46% in Q4FY2019.
The advances growth of the bank moderated to 3%, but the bank has exhibited healthy 11% growth in the focused retail, agriculture and MSME loan book. The bank has maintained stable CASA deposits ratio at 25% end March 2020.
Asset quality stable: Asset quality of the bank was stable with the sequential decline in fresh slippages of loans and higher NPA reductions in Q4FY2020.
- Fresh slippages of advances were lower at to Rs 332 crore in Q4FY2020. The recoveries and upgradations and write-offs stood at Rs 314 crore in Q4FY2020.
- The standard restructured advances book of the bank increased to Rs 803 crore at end March 2020 from Rs 703 crore end December 2019.
- Provision coverage ratio increased to 54.2% end March 2020.
| Asset Quality Indicators: South Indian Bank |
|
Mar-20 |
Dec-19 |
Sep-19 |
Jun-19 |
Mar-19 |
Variation |
| QoQ |
YoY |
| Gross NPA (Rs Crore) |
3261.77 |
3243.69 |
3145.20 |
3154.22 |
3131.67 |
1 |
4 |
| Net NPA (Rs Crore) |
2150.78 |
2211.88 |
2193.15 |
2134.73 |
2163.62 |
-3 |
-1 |
| % Gross NPA |
4.98 |
4.96 |
4.92 |
4.96 |
4.92 |
2 |
6 |
| % Net NPA |
3.34 |
3.44 |
3.48 |
3.41 |
3.45 |
-10 |
-11 |
| % PCR |
54.20 |
50.40 |
48.10 |
45.10 |
42.50 |
380 |
1170 |
| % CRAR - Basel III |
13.41 |
12.02 |
12.08 |
12.17 |
12.61 |
139 |
80 |
| % CRAR - Tier I - Basel III |
10.80 |
9.60 |
9.60 |
9.70 |
10.00 |
120 |
80 |
| Variation in basis points for figures given in percentages and in % for figures in Rs crore |
Business Highlights:
Business growth slows: Business growth of the bank moderated to 3% yoy at Rs 148558 crore at end March 2020 over March 2019. The moderation in business growth was driven by deceleration in advances growth to 3% yoy at Rs 65524 crore at end March 2020, while the deposits growth also eased to 3% at Rs 83034 crore at end March 2020.
Retail, agriculture, MSME loan book continues to drive growth: The corporate book dipped 13% to Rs 18659 crore, while its share in loan book fell to 28% end March 2020 from 34% end March 2019. The retail loan book expanded 15% to Rs 21173 crore, agriculture book moved up 14% to Rs 9873 crore and MSME loan book gained 5% to Rs 15819 crore end March 2020.
Within the retail book, the mortgages jumped 18% to Rs 5250 crore at end March 2020. Gold loan book increased 24% to Rs 2757 crore, loan against FDs 26% to Rs 1746 crore and vehicle 7% to Rs 1086 crore at end March 2020.
CASA ratio stable: CASA deposits of the bank increased 7% at Rs 20760 crore gaining the share in overall deposits to 25.0% at end March 2020 compared to 24.2% a year ago.
Network expansion: Bank has network of 929 branches and 1424 ATMs at end March 2020.
Book Value per share stood at Rs 28.5 per share at end March 2020, while adjusted Book value (adjusting for NNPA and 10% of restructured advances) was at Rs 16.1 per share at end March 2020.
Quarterly Performance:
NII growth improves on higher NIMs: Bank has reported 19% growth in Net Interest Income (NII) at Rs 595.76 crore for the quarter ended March 2020. The interest earned increased 9% to Rs 1947.67 crore, while interest expended rose 5% to Rs 1351.9 crore in the quarter ended March 2020.
Non-interest income jumps: The non-interest income of the bank increased 67% to Rs 394.21 crore in Q4FY2020, as the treasury income surged to Rs 226 crore from Rs 65 core a year ago and other income moved up 16% to Rs 57 crore in Q4FY2020. Core fee income of the bank declined 13% to Rs 65 crore, while forex income dipped 14% to Rs 12 crore in Q4FY2020.
Net total income increased 35% to Rs 989.97 crore in the quarter ended March 2020.
Expense ratio improves: The operating expenses of the bank rose 12% to Rs 456.55 crore in the quarter ended March 2020. The expense ratio dipped to 46.1% in the quarter ended March 2020. The operating profit jumped 63% to Rs 533.42 crore in Q4FY2020.
Provisions up: The provisions and contingencies increased 230% to Rs 723.80 crore in the quarter under review. The provisions for NPA moved up to Rs 360 crore and standard assets Rs 104 crore, while investment provisions zoomed to Rs 263 crore in Q4FY2020.
With the surge in provisions, the pre-tax loss came in at Rs 190.38 crore in Q4FY2020.
The bank has written back tax provisions of Rs 46.69 core, helping to reduce the net loss to Rs 143.9 core in the quarter ended March 2020.
Financial Performance:
For the year ended March 2020 (FY2020), the bank posted 58% dip in the net profit at Rs 104.59 crore. The net interest income increased 15% to Rs 2317.50 crore, while non-interest income moved up 44% to Rs 1045.75 crore in FY2020. The operating expenses increased 14% to Rs 1717.61 crore, while provision and contingencies moved up 74% to Rs 1496.09 crore in FY2020. The profit before tax dipped 61% to Rs 149.55 crore in FY2020. The expense ratio dipped to 51.1% in FY2020 compared to 54.9% in FY2019. After considering 30.1% of effective tax rate down from 34.9% in FY2019, the net profit declined 58% to Rs 104.59 crore in FY2020.
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