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Summary
- Corporate banking contributes profit after long gap
- the SIB share has traversed from a low of Rs7.85 as on July 22, to touch its 6-month high of Rs20.65 on December 15
KOCHI: The financial results of the Thrissur-based South Indian Bank (SIB) for the third quarter ending December 31, 2022 have certainly failed to enthuse its shareholders as the net profit for the quarter plunged 53.94 per cent quarter-on-quarter (QoQ) from Rs223.10 crore to Rs102.75 crore.
However, the Q3 net profit this time marks a turnaround compared with the same period last year when the bank reported a loss of Rs50.31 crore.
Reflecting the ‘big fall’ in profit, the SIB share price declined by 8.54 per cent to Rs16.60 on NSE before the market closed for trading today (Tuesday).
During the past 6 months, the SIB share has traversed from a low of Rs7.85 as on July 22, to touch its 6-month high of Rs20.65 on December 15, before settling at Rs16.60 on NSE today.
The bank generated a total income of Rs1,864.09 crore for the quarter under review compared with Rs1,893.11 crore for the same period last year and Rs1,995.24 crore for the immediate previous quarter that ended June 30, 2022.
Provisions during the quarter at Rs41.43 crore were far lower compared with Rs364.37 crore a year ago and Rs179.29 crore for the previous quarter.
A key aspect that made the difference for the quarter under review could be the other income, which was a negative Rs34.18 crore for the third quarter of the current year compared with a positive Rs255.10 crore for the previous quarter and Rs221.98 crore for the same quarter a year ago.
Asset Quality
While the gross NPA was at Rs3,843.57 crore for the quarter ended December 31, 2022, that for the same quarter last year was at Rs3,883.01 crore for the same period last year and Rs3,856.13 crore during the previous quarter ended on June 30.
Percentage-wise, the gross NPA has declined from 6.56 per cent a year ago to 5.48 per cent for the December ending quarter, 2022.
Net NPA has reduced from 3.52 per cent to 2.26 per cent for the quarter under review. The capital adequacy ratio (CAR) has improved from 15.68 per cent a year ago to 16.25 as of December end, 2022.
Segment performance
In fact, treasury operations of the bank during the quarter witnessed a loss (before tax) of Rs158.80 crore compared with Rs48.33 crore profit for the previous year quarter and Rs64 crore for the same quarter a year ago.
The increase in the interest rate in the past few months has been the main reason for this phenomenon.
More importantly, the corporate banking contributed a profit (before tax) of Rs50.83 crore for the bank this time, unlike in the previous several quarters when the corporate segment could contribute only loss to the bank’s bottom line.
