The South Indian Bank (SOUTHBANK) Q1 25/26 earnings summary

Executive summary

• Net profit for Q1 FY26 rose 10% year-over-year to ₹322 crore (₹32,217 lakhs consolidated), with operating profit up 32% to ₹672 crore and total income up 13% to ₹1,454 crore.

• Gross advances grew 8% year-over-year to ₹89,198 crore, and deposits increased 9% to ₹112,922 crore, with total business surpassing ₹2 lakh crore.

• Asset quality improved, with GNPA at 3.15% and NNPA at 0.68%, and provision coverage ratio rising to 88.82%.

• Return on assets was 1.01% and return on equity 12.41% for the quarter.

• Over 98% of transactions were digital, reflecting strong digital adoption.

Financial highlights

• CASA grew 9% year-over-year to ₹36,204 crore, with a stable CASA ratio at 32.06%.

• Net interest income declined 4% year-over-year to ₹832 crore, while non-interest income surged 47% to ₹622 crore, driven by treasury and forex gains.

• Operating expenses remained flat year-over-year at ₹782 crore, and cost-to-income ratio improved to 52.6%.

• Slippage for the quarter was 20 bps (₹182 crore), with collection efficiency at 99.1%.

• Treasury income of ₹256 crore was used to strengthen provisioning.

Outlook and guidance

• Credit growth targeted at over 12% for FY26, with deposit growth to match credit growth.

• ROA expected to remain around 1% for FY26, with potential to reach 1.15% as funding costs decline.

• MSME loan growth guidance revised to 15–18% for the year.

• NIMs expected to bottom out in Q2, with normalization anticipated from Q3 onward barring further repo changes.

• Continued investment in digital initiatives and process automation to drive operational efficiency.