South Indian Bank reported -4.83% fall yoy in revenues in the Dec-20 quarter at Rs2082.08cr. For the quarter ended Dec-20, South Indian Bank reported growth in treasury income and interest on retail loans. However, like most of the other banks, South Indian Bank also saw a sharp fall in corporate banking revenues by nearly 30% on a yoy basis.
For the Dec-20 quarter, the operating profits were down -1.48% at Rs377.46cr. While the interest expenses were lower on the back of falling rates, the quarter saw a sharp spike in the employee expenses of the bank. Operating margin or OPM still expanded marginally from 17.51% in Dec-19 quarter to 18.13% in the Dec-20 quarter.
The bank reported a net loss of Rs-91.62cr in the Dec-20 quarter as against a profit of Rs90.54cr in the Dec-19 quarter. This turnaround from profit to loss was largely due to the near doubling of doubtful debt provisions from Rs261cr in Dec-19 quarter to Rs499cr in the Dec-20 quarter. PAT margins obviously fell into negative from a positive level of 4.14%.
Financial highlights for Dec-20 compared yoy and sequentially
|
|
South Indian Bank |
|
|
|
|
Rs in Crore |
Dec-20 |
Dec-19 |
YOY |
Sep-20 |
QOQ |
|
Total Income (Rs cr) |
₹ 2,082.08 |
₹ 2,187.73 |
-4.83% |
₹ 2,138.74 |
-2.65% |
|
Operating Profit (Rs cr) |
₹ 377.46 |
₹ 383.14 |
-1.48% |
₹ 413.97 |
-8.82% |
|
Net Profit (Rs cr) |
₹ -91.62 |
₹ 90.54 |
N.A. |
₹ 65.09 |
N.A. |
|
|
|
|
|
|
|
|
Diluted EPS (Rs.) |
₹ -0.51 |
₹ 0.50 |
|
₹ 0.36 |
|
|
Operating Margins |
18.13% |
17.51% |
|
19.36% |
|
|
Net Margins |
-4.40% |
4.14% |
|
3.04% |
|
|
Gross NPA Ratio |
4.90% |
4.96% |
|
4.87% |
|
|
Net NPA Ratio |
2.12% |
3.44% |
|
2.59% |
|
|
Return on Assets |
-0.37% |
0.37% |
|
0.27% |
|
|
Capital Adequacy |
14.47% |
12.02% |
|
13.94% |
|
Key takeaways from the Dec-20 quarter results
-
The gross and net NPAs are much higher than acceptable standards for a private bank and the huge provisions made in the current quarter is a signal of the stress that the loan book of the bank is under.
-
While the ROA may not be applicable in the current quarter, the average median ROA at 0.3% is much below the industry average of above 0.5%. Also, the capital adequacy is hovering around 13-14% and that leaves little room to expand the asset book aggressively.
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