South Indian Bank: Strong Banking
Suparna / 17 Jan 2014
Despite all the troubles some banks have done reasonably well in the December quarter. South Indian Bank is one of them. Here is a preview of its results and the performance highlights which are pushing the stock upwards.
South Indian Bank (SIB) has announced its Q3FY14 financial results, where it has reported a net profit of Rs 141.31 crore for the quarter, up by 11.49% compared to the Rs 128.25 crore it had earned during the corresponding quarter last year.
As regards its operational performance, the bank earned a Net Interest Income (NII) of Rs 350.46 crore, down 0.61% YoY from Rs 364.08 crore it had earned during Q2FY14. Its other income grew by 37.90% to touch Rs 84.62 crore in Q3FY14 from Rs 66.16 crore in Q3FY13.
On the provisions and contingencies front, there was a sharp decline of 95.61% on a YoY basis. Its provisioning came down sharply to Rs 2.02 crore during the quarter ending December 2013 from Rs 45.99 crore in the corresponding quarter last year.
The bank has been able to sustain its NII and asset quality at healthy levels. Its gross Non-Performing Assets (NPA) improved to 1.66% during the current quarter from 1.92 % in Q2FY14 and 1.62% in the corresponding quarter last year. In absolute term, its Gross NPAs decreased by 9.72% on a quarterly basis and increased by 16.88% on a yearly basis to Rs 554.63 crore. The Net NPAs also declined by 21 bps on a sequential basis to 1.18% and in absolute terms were down by 10.89% on a quarterly basis to Rs 391.93 crore.
We believe that its operating performance and asset quality are likely to strength further and it has reported a reasonably healthy earnings growth. On the day of the results (January 16, 2014), its shares gained 4.80% to touch Rs 21.40.
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