The South Indian Bank (SOUTHBANK) Q2 25/26 earnings summary

Executive summary

• Net profit for Q2 FY26 was ₹351 crores, up 8% year-over-year from ₹325 crores in Q2 FY25, with strong portfolio quality and a shift towards MSME and retail lending.

• Transformation since 2020 has resulted in a more granular, diversified loan book and improved asset quality.

• Standalone and consolidated financial results for the quarter and half year ended September 30, 2025, were reviewed and approved by the Board, with unmodified limited review reports from joint statutory auditors.

• The results reflect consistent application of accounting policies and necessary provisions for NPAs, standard assets, and other regulatory requirements.

Financial highlights

• Net profit for Q2 FY26 was ₹351 crores, up 8% YoY; total income rose to ₹1,324 crores, and gross advances grew 9% YoY to ₹92,286 crores.

• Deposits increased 10% YoY to ₹1,15,635 crores; NIM for the quarter was 2.8%, considered the trough.

• Non-interest income surged 26% YoY, driven by treasury, forex, and other income.

• Return on assets stood at 1.02%; return on equity at 13.11%.

• Capital adequacy ratio was 17.70%, with Tier 1 at 16.79% as of September 30, 2025.

Outlook and guidance

• NIMs expected to recover unless further rate cuts occur; management aims to surpass 3% NIM.

• Retail and MSME loan books targeted to grow 20%+ annually, with continued focus on digital transformation and operational efficiency.

• Corporate book to be reduced to about one-third of total advances over 18 months, with retail/MSME taking up the slack.

• Slippage for FY26 expected to double H1 levels, with no material degradation anticipated.

• Ongoing investments in digital channels and partnerships to drive non-branch distribution.