The South Indian Bank (SOUTHBANK) Q1 24/25 earnings summary

Executive summary

• Net profit for Q1 FY25 reached ₹294 crore (₹29,390 lakh), marking a 45-46% year-over-year increase, with total advances at ₹82,580 crore and deposits at ₹103,532 crore, reflecting robust business momentum.

• Transformation since 2020 led to 73% churn in the loan book, higher share of A+ rated corporate loans, and improved asset quality.

• Digital transactions accounted for 97.79% of total, with continued focus on technology and operational efficiency.

• Unaudited consolidated and standalone financial results for the quarter ended June 30, 2024, were reviewed and approved by the Board and subjected to limited review by joint statutory auditors, with unmodified reports issued.

• The results include the performance of the bank and its subsidiary, SIB Operations and Services Limited.

Financial highlights

• Net interest income stood at ₹866 crore, up from ₹808 crore in Q1 FY24; non-interest income up 17% YoY to ₹422 crore.

• Operating profit increased 4% YoY to ₹508 crore; PAT up 46% YoY to ₹294 crore.

• Consolidated total income for Q1 FY25 was ₹2,73,596 lakh, up from ₹2,38,606 lakh in Q1 FY24.

• Gross advances rose 11-12% YoY to ₹82,580 crore; deposits up 8% YoY to ₹103,532 crore; total business grew 10% YoY.

• NIM at 3.26%, ROA at 1.00%, ROE at 12.90%.

Outlook and guidance

• Targeting NIM of 3.5% over the next 6 quarters, with a glide path to higher levels thereafter.

• Automation and digital channel expansion to continue, with new lending processes and product launches expected through FY25.

• Expense growth for the year aimed to be contained at or below 10%, with revenue growth targeted above this to widen PPOP.

• Full-year slippage expected to be around ₹1,200 crore, with Q1 seen as a seasonal outlier.

• The bank continues to apply significant accounting policies and provisions in line with regulatory requirements.