BBN Bureau
Corporate portfolio a sticking point
KOCHI/January 20-2022: The Thrissur-headquartered South Indian Bank (SIB) has witnessed yet another ‘bad’ quarter as the lender closed the third quarter ending December 31, 2021 with a loss of Rs50.31 crore even as the 9 months period ended with a much larger loss of Rs227.06 crore.
SIB has reported a loss to the tune of Rs187.06 crore for the previous quarter (Q2) too compared with Rs91.62 crore loss a year earlier.
Corporate book continues to be a pain point
The corporate loan book has been punishing the bank for quite a while now. During the quarter under review, while the retail book contributed Rs57.61 crore (before tax) to the bottom line, the corporate portfolio burnt a hole in its pocket by handing out Rs244.93 crore loss (before tax) to the bank.
The streak of losses the bank witnessed through quarters has diminished the net worth of the bank to Rs4980 crore, falling below Rs5000 crore after a gap.
The overhang of large bad loan book has been a sticking point for the bank for some time and this has even prompted the bank to shrink the size of the corporate loan portfolio over the past few years.
The total income for the quarter under review has fallen to Rs1893.11 crore compared with Rs2036.64 crore for the same period a year ago.
The bank said a new loan book of Rs18,000 crore based on new accounts has been opened since October 1, 2020 and the encouraging aspect is that non-performing assets (NPA) from the new book is less than 0.1 per cent.
SIB has substantially improved its provision coverage ratio (PCR) by 306 basis points (3.06 percentage points) sequentially during the quarter to 68.10 per cent.
NPA numbers have also marginally improved as gross NPA dropped to 6.56 per cent and net NPA by 33 basis points to 3.52 per cent as of December end, 2021.
The gold loan book that has been growing consistently through several quarters has logged 12 per cent growth year-on-year to reach Rs9,862 crore as of end Q3. The bank’s capital adequacy position is also comfortable with the CRAR at 15.68 per cent.
The bank that has taken a conservative approach to lending now enjoys a credit deposit (CD) ratio of 65 per cent as of December end, 2021.
