KOCHI: South Indian Bank (SIB) marked a major market milestone, with its share price touching an intra-day high of Rs40.30, coming close to its book value (BV) of Rs40.60 for the first time in many years.
Moreover, the bank’s market capitalisation also surpassed Rs10,000 crore, reflecting renewed investor confidence after years of trading at a fraction of its net worth.
Driving this optimism is SIB’s aggressive push into digital assets. SIB aims to double its digital portfolio from Rs1,500 crore as of September-end to Rs3,000 crore by year-end.
These assets, originating through co-lending arrangements, span home loans with Godrej Housing Finance, gold loans with FedFina, IIFL Finance and Rupeek Capital, personal loans with Moneyview and Muthoot Fincorp, loans against mutual funds, and other innovative products – all without direct branch involvement.
Corporate book
SIB is also strategically reshaping its loan book. The corporate loans of SIB, which have historically contributed to NPAs, have been reduced from 42 per cent to 40 per cent of total loans and are targeted to drop to one-third in the next 18 months.
This reduction will be absorbed by rapid growth in MSME and retail portfolios, which are expected to grow at over 20 per cent annually. Gold loans now constitute 20.4 per cent of the balance sheet, while home and auto loans contribute roughly 25 per cent each.
Financial performance reflects the transformation. The bank posted a net profit of Rs351 crore for the quarter, with deposits up 10 per cent, return on assets (RoA) at 1.3 per cent, capital adequacy ratio (CAR) at 17.7 per cent, and Tier-1 at 16.7 per cent.
Recoveries for the quarter totalled Rs354 crore, including GNPA reversals of Rs334 crore and Rs66 crore from write-offs, with the provision coverage ratio (PCR) at 81.2 per cent.
On the treasury front, the bank has grown both held-to-maturity (HTM) and available-for-sale (AFS) government securities portfolios in anticipation of RBI rate cuts, balancing potential valuation gains with stability.
Selective hiring and new wealth management products indicate that the bank is preparing for the next growth phase while maintaining operational discipline.
With strong capitalisation, a high-growth digital engine, and a leaner corporate portfolio, SIB is positioning itself to further strengthen its retail and MSME franchise – a strategy now being validated in the capital markets.
