South Indian Bank jumps 12% after it clocked robust March quarter results

Shares of South Indian Bank garnered strong investor interest as it soared 12.5 per cent to Rs 18 per share, after the private sector lender registered a 23 per cent year-on-year (YoY) rise in net profit to Rs 334 crore in the January-March quarter of FY23 (Q4FY23).

In the past one month, shares of South Indian Bank soared 20 per cent, as against a 2 per cent rise in the S&P BSE Sensex. Earlier, the stock had hit a 52-week high of Rs 21 per share on December 15, 2022.

The Thrissur-based bank's net interest income, meanwhile, was up 4 per cent YoY to Rs 857 crore in Q4FY23, whereas operating profit surged 95 per cent YoY to Rs 562 crore.

Gross non-performing assets (GNPAs), too, saw moderation of 76 basis points (bps) to 5.1 per cent in Q4FY23 from 5.9 per cent, in the year-ago period. Non-performing assets, moreover, dropped 111 bps YoY to 1.86 per cent in Q4FY23.

The management said that the bank witnessed growth across all segments in the March quarter as they focused on building quality assets in all verticals like corporate, SME, auto loan, among others.

"In line with the strategy of profitability through quality credit growth, the bank could churn around 58 per cent of its advances portfolio since October 2020 amounting to Rs 41,566 crore, with a GNPA of only 0.09 per cent," said Murali Ramakrishnan, managing director and chief executive officer of South Indian Bank.

That apart, the board of directors also recommended a dividend of Re 0.30 per equity share of face value of Re 1 each (30 percent) for the financial year ending March 31, 2023.

Earlier, in April, the lender had hiked its marginal cost of funds based lending rates (MCLR) by 5-10 bps. The overnight lending rate saw the highest increase of 10 bps to 8.80 percent from 8.7 per cent.