South Indian Bank Ltd. share price target

South Indian Bank (SIB) reported a better-than-expected Q1FY26 with PAT of INR 3.2bn (5% beat) and a sharp improvement in asset quality. Despite NIM headwinds (down 18bps QoQ), SIB sustained ~1% RoA for the eighth consecutive quarter, aided by strong other income.

Higher Treasury income and moderate opex offset SIB’s Q1 lower margins (down 18bps q/q), keeping overall operating performance stable.

South Indian Bank (SIB) reported better-than-expected Q4FY25 PAT of INR 3.4bn (up 19% YoY; 8% beat), driven by other income. It sustained ~1% RoA for seventh consecutive quarter with FY25 RoA at 1.06%.

South Indian Bank (SIB) reported a mixed set of numbers with softer business growth and higher credit costs broadly offset
by strong other income and contained opex

Muted NII and lower Treasury income led to the decline in South Indian
Bank’s Q4 operating profit.

Despite muted loan growth, South Indian Bank (SIB) reported a strong Q2FY24 with PAT at INR 2.75bn (97bps RoA), driven by benign credit costs while asset quality improved. In the last three years, SIB has come a long way and we believe the ongoing transformation journey should re-accelerate under Mr Seshadri.

The RBI has approved the candidature of Mr P R Seshadri (ex MD & CEO of Karur Vysya Bank) as MD & CEO of South Indian Bank (SIB) for three years with effect from 1st Oct’23. In our view, Mr Seshadri was instrumental in putting new-age lending practices, overhauling risk architecture and transforming HR practices at Karur Vysya Bank (KVB) during his term (Sep’17-Mar’20), a time when the banking system was undergoing severe profitability pressure due to corporate asset quality cycle.

Despite healthy other income, South Indian Bank (SIB) reported weak Q1FY24 PAT at INR 2.0bn, pulled down by 33 bps decline in NIM, rise in staff costs and jump in provisions on the back of massive write-offs. Corporate book has risen massively by 17% QoQ, putting pressure on NIM as well.

Led by NIMs uptick, negative net slippages and strong other income (including lumpy TWO recovery), South Indian Bank (SIB) has reported strong Q4FY23 with PAT of Rs3.34bn and annualised RoAs at 1.26%. FY23 has been one of the strongest years for the bank with highest-ever business, record disbursement and highest ever tier 1.

South Indian Bank (SIB), post the onboarding of new MD in Sep’20, continues to deliver in line with its Vision 2025 programme. It focused on growing the balance sheet in a calibrated manner with emphasis on NIMs and asset quality.