KOCHI: South Indian Bank (SIB) has signaled a quiet turnaround in its asset quality, even as it posted a 9.46 per cent rise in net profit to Rs321.95 crore for the first quarter of FY26.
But beyond the bottom line, it’s the sharp fall in bad loans that stands out.
The net non-performing assets (NPA) of South Indian Bank dropped to 0.68 per cent from 1.44 per cent a year ago, while gross NPA came down by 135 basis points to 3.15 per cent. This significant clean-up was made possible by more than doubling provisions, which jumped 112 per cent from Rs113 crore to Rs239 crore.
As a result, the bank achieved its highest ever provision coverage ratio of 88.82 percent including write-offs, and 78.93 percent excluding them.
Other income surges
Despite a dip of nearly 4 per cent in net interest income (NII), which fell to Rs833 crore from Rs866 crore, South Indian Bank recorded strong gains in other income – up 24 per cent year-on-year to Rs622 crore. Operating profit surged 32 per cent to Rs672 crore for the quarter.
On the liabilities side, the bank saw steady growth in deposits. Retail deposits rose by nearly Rs9,600 crore to Rs1.09 lakh crore, a year-on-year increase of 9.65 per cent. NRI deposits grew 7.3 per cent, and the CASA base improved by 9 per cent. Gross advances climbed 8 per cent to Rs89,198 crore, with personal loans, housing loans, and vehicle loans showing robust growth.
Personal loans grew 26 per cent year-on-year, housing loans rose by 66 per cent, and vehicle loans by 27 per cent. The gold loan portfolio, a traditional strength for the bank, rose by 7 per cent.
Healthy capital base
The capital adequacy ratio stood strong at 19.48 per cent as on June 30, 2025, indicating a healthy capital buffer.
Chief Executive and MD, P R Seshadri, said the bank’s strategy continues to focus on sustained profitability, superior asset quality, and a resilient retail liability portfolio. He added that organisational sharpening and digital initiatives have helped improve overall performance across targeted segments.
While profit growth is healthy, it is the deeper clean-up in the loan book that offers a clearer signal of the bank’s intent to rebuild confidence. After years of scrutiny over asset quality, South Indian Bank appears to be reworking its fundamentals – buying credibility through caution.
