SIB’s Rs144 cr Q4 loss may be first time in bank’s history

Bank closes FY20 with Rs104.59cr profit

THRISSUR: The South Indian Bank (SIB) has broken a long streak of continuous profits or rather has tasted loss for the first time when the bank reported a quarterly loss of Rs143.69 crore for the fourth quarter (Q4) of 2019-20 against Rs70.51 net profit the bank posted for the same period last year.

This is in contrast to the performance of CSB Bank, another contemporary of SIB from the same town, which broke a long streak of continuous losses during the same period.

However, SIB closed the year with a net profit of Rs104/59 crore against Rs247.53 crore for the previous year – a steep decline of 57.75 per cent. The SIB shares closed at Rs8.90 on Friday (June26) after witnessing limit-up two days during the week

The bank though performed well on the business side during the year earning an operating profit of Rs1645.64 crore, improving on the previous year’s figure of Rs1238.98 crore by a third, the nonagenarian bank hit the skids at the large provisioning requirement at Rs723.80 crore for Q4, compared with Rs219.15 crore during the comparable quarter last year – growing by more than 2.3 times.

The outgoing managing director did do a great job towards turning around the bank, which has been wilting under the legacy bad loans, by paring the corporate loans and adding more retail loans to the book.

Though the bank has set aside a much larger amount towards provisioning, the bad loan levels refused to drop substantially. While the gross NPA as of March end, 2020 stood at Rs3261.77 crore or 4.98 per cent, the net NPA was at Rs2150.78 crore or 3.34 per cent.

The bank with an asset base of Rs97,032 crore as of FY20- end, sits on a capital adequacy ratio (CAR) of 13.41 per cent.

The corporate portfolio, like for most banks in the recent years, has been the chink in the SIB armour.

While treasury and corporate book contributed loss to the tune of Rs81.66 crore and Rs427.51 crore respectively to the FY20 bottom line (before tax), retail portfolio did generate profit of Rs409.39 crore this time too

 

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