South Indian Bank Q4FY13 Results A Mixed Bag

South Indian Bank (SIB), a Kerala-based private sector bank, has posted a mixed set of numbers for the fourth quarter of FY13. The bank’s Net Interest Income (NII) grew by 17% on a yearly basis, while this was down 5% on a quarterly basis to Rs 330.7 crore. Its Other Income grew by a whopping 47% on a yearly basis to Rs 120.96 crore. This helped SIB to post a 26% jump in its net profit on a yearly basis to Rs 153.83 crore.

There was some improvement in its asset quality, with the Gross NPAs as a percentage of advances going down from 1.62% to 1.36% on a sequential basis. Nonetheless, the provisioning by the bank was higher than the street’s expectations, going up by 43% to Rs 65.89 crore for Q4FY13 against Rs 45.99 crore for Q3FY13. Its Net NPAs have increased by 10 basis points on a sequential basis to 0.78%.

In a segment-wise analysis, corporate banking has seen its revenues increasing by 31% to Rs 511 crore, while retail and treasury went up by 7% and 16% to Rs 501 crore and Rs 238 crore respectively. In terms of segmental profits, corporate banking turned into profit for the quarter ended March 2013 to Rs 28.95 crore against a loss of Rs 34.9 crore seen in the corresponding quarter last year. However, treasury saw a sharp fall in profits to Rs 76.2 crore against that of Rs 14.12 crore in the same quarter last year.

SIB is adequately capitalised as at the end of March 31, 2013, and has a Capital Adequacy Ratio (CAR) of 13.91%. The return on assets of the bank has improved on a yearly basis from 1.27% to 1.35% for Q4FY13.

The board of directors has proposed a dividend of Rs 0.7 per share, which gives a dividend yield of around 3% at its current market price of Rs 24.20. SIB's shares are currently trading at a price-to-book value of 1.3x, which fairly discounts the bank's current performance.