South Indian Bank is a private sector bank headquartered at Thrissur in Kerala having 1,426 ATMs and 875 branches, with around 84% of them in South India. Currently, the bank is having a loan book size of ~Rs65,819cr and deposit base of ~Rs82,469cr. Advances reported a growth of 3% on a YoY basis with annualized growth in retail gold loans, agriculture and MSME loans. Stable growth in deposit at 8% YoY due to 12% annualized improvement in CASA ratio. NRI deposits increased 13% YoY...

Covid-19 impact only adds to the existing set of challenges South Indian Bank (SIB) reported NII in line with our estimate at Rs5,958mn, up 19.3% YoY and down 1% QoQ. Overall advances grew by 2.8% YoY and 0.2% QoQ. Reported NIM at 2.67% was weak compared to 3QFY20 and 2QFY20 as yields on advances declined 23bps QoQ to 9.59%. Adjusting for the Rs150mn interest on IT refund in 3QFY20, calculated NIM was stable QoQ. Non-interest revenue was up 67.3% YoY and 78.8% QoQ, led by Rs2.3bn worth of treasury income. Excluding treasury income, non-interest revenue was down 1% YoY and 11% QoQ. Total opex grew by 12% YoY and 4% QoQ. Operational profitability was enhanced (up 62.9% YoY, 39.2% QoQ) due to exceptionally high treasury income. We...

The bank reported steady business traction with credit & deposit growth stable at 9% & 11% to | 65334 crore & | 80451 crore, respectively. The bank's strategy of gaining higher share in retail & MSME advances coupled with retailisation of liability has been working well with credit growth within retail & MSME being higher than overall credit growth at 18% YoY & 17% YoY to | 19834 crore & | 25787 crore, respectively. In contrast, the corporate book has see de-growth of 7% YoY to | 19713 crore. Retail deposit & CASA...

South Indian Bank is a private sector bank headquartered at Thrissur in Kerala having 1,401 ATMs and 870 branches, with around 84% of them in South India. Currently, the bank is having a loan book size of ~Rs65,334cr and deposit base of ~Rs80,451cr. Advances reported a moderate growth of 9% on a YoY basis with sequential growth in retail ,agriculture and MSME loans. Stable growth in deposit at 11% YoY due to 13% YoY increase in retail deposits and improvement in CASA ratio....

South Indian Bank (SIB) reported 3QFY20 results with the key takeaways being: (1) Corporate slippages story largely over; NPA ratio at peak as per guidance (2) NIM expands for the third consecutive quarter, driven by higher growth in retail (3) Retail continues to be the focus, driven by mortgages, gold and auto loans; corporate growth flat. (See comprehensive analyst meet takeaways on page 2 for significant incremental colour). Per se, on the key P&L; items, SIBL posted NII growth of 16% YoY at Rs6,018mn, PPOP growth of 15% YoY at Rs3,831mn and PAT growth of 8% YoY at Rs905mn. We have revised our estimates for FY20/FY21/FY22 and have...

South Indian Bank (SBL) reported 1QFY20 results with the key takeaways being: (1) Asset quality is stabilizing with current slippage of Rs. 2.41 bn tracking management guidance (2) Better asset pricing key to NIM expansion and (3) Corporate growth was muted; retail growth was driven by mortgages, auto and gold loans (See comprehensive analyst meet takeaways on page 2 for significant incremental colour). Per se, on the key P&L; items, SIBL posted NII growth of 8% YoY at Rs5,357mn, PPOP growth of 18% YoY at Rs3,176mn and PAT growth of 218% YoY at Rs733mn. We have revised our estimates for FY20/FY21 and have retained Buy rating on SBL, revising our target price to Rs15 (from Rs15 earlier) and valuing the stock at 0.5x FY21E P/BV....

SIB's loan book showed a sound growth of 13% YoY in 1QFY20 (down 0.1% QoQ). The growth was led by Retail (25% YoY, 3% QoQ) and Agriculture (14% YoY, 4% QoQ) segments. The share of retail segment as a proportion of total loan book is 30%, upward by 300 bps YoY driven by LAP (average ticket size of 38 lakhs) and gold loan portfolios. Management reiterated that their focus will continue to be on Retail, MSME and Agri...

which helped stable asset quality but marginally lift PCR to 32.3% (45.1% incl. Bank's operating metrics like NIMs & CASA profile remained stable (PLe: Rs890mn) as operating performance is improving only gradually. technical w.off). Bank is closely monitoring some of the dispensation related...

South Indian Bank (SBL) reported 4QFY19 results with the key takeaways being: (1) Excluding a Rs 1.14bn slippage of a long-standing account, NPA addition at Rs 2.54bn remained moderate compared with a 10-quarter average (ending 1QFY19) of Rs4.96bn (2) NIM displayed a 20 bps contraction QoQ to 2.46% since MCLR re-repricing is still to fully play out and there was a spike in bulk deposit cost (3) Loan book continues to retailise in a meaningful way with core retail book growing 29% YoY (See comprehensive conference call takeaways on page 2 for significant incremental colour). Per se, on the key P&L; items, SIBL posted NII growth of 2% YoY at Rs4,994mn, PPOP growth of 5% YoY at Rs3,276mn and PAT decline of 38% YoY at Rs705mn. We...

Barring IL&FS;, Corporate Book Remains Under Control BUY South Indian Bank (SBL) reported 3QFY19 results with the key takeaways being: (1) Excluding Rs 4bn slippage pertaining to IL&FS; group, NPA addition of Rs 2.59bn remained moderate compared with a 10-quarter average (ending 1QFY19) of Rs4.96bn, (2) NIM displayed a 5 bps rise QoQ to 2.66% with MCLR re-repricing still to play out. (3) Loan book continues to retailise in a meaningful way with core retail book growing 29% YoY (See comprehensive conference call takeaways on page 2 for significant incremental colour). Per se, on the key P&L; items, SIBL posted NII growth of 2% YoY at Rs5,196mn, PPOP growth of...

21 January 2019 Higher provisions dragged South Indian Banks (SIB) 3QFY19 PAT to INR838m (27% YoY decline) even as operating profit growth stood flat. Fresh slippages increased to INR6.59b led by downgrade of IL&FS; exposure (INR4b) and one EPC account (INR1.03b). But, slippages in retail and agri portfolio improved. Advances growth improved 15% YoY / 5% QoQ while margins improved 5bp QoQ to 2.66%. However, NII growth stood modest at 2% YoY / 2.6% QoQ. C/I ratio improved marginally to 53% mainly supported by other income (18% YoY growth). SIB is yet to provide for INR153m of unamortized MTM provision in the next quarter. Loan growth at 15% YoY was led by 29% YoY growth in pure retail loans while the corporate loan segment grew 14% YoY. The growth in agriculture/SME book stood relatively modest at 7%/6% YoY. Corporate book now comprises ~35% of the total advances.

Declining market share in its home state of Kerala has been a wake-up call for SIB. To recoup the recent loss in market share, SIB now aims to leverage its existing customer relationship by cross selling. The bank has constituted a separate 'business development channel' in addition to its existing branch network to speed up the sourcing of retail products.

South Indian Bank (SBL) reported 2QFY19 results with the key takeaways being: (1) NPA addition moderated to Rs2.13bn compared with a past 10-quarter average of Rs4.96bn, with management guiding for ~Rs2.5bn slippage per quarter over the remainder of FY19 (2) NIM seems to have bottomed out, displaying a 1 bp rise QoQ to 2.61% with MCLR re-repricing still to play out over 2HFY19 given most of MCLR-linked book has a ~1 year tenure. (3) Loan book is retailising in a meaningful way with core retail book growing 31% YoY (See comprehensive conference call takeaways on page 2). Per se, on the results front, SIBL posted NII growth of 1% YoY at Rs5,065mn, PPOP decline of 33% YoY at Rs3,098mn and PAT growth of 1,523% YoY at Rs701mn....

SIB's earnings were relatively better in light of Kerala floods with flat NII growth on back of sustained loan growth of 15-16% YoY and controlled opex. Lower trading income continues to impact other income & PPOP, while MTM dispensation over four quarters has been also keeping provisions on higher side. Floods in Kerala did not hurt asset quality as was envisaged earlier with slippages of Rs2.13bn coming in lower than expectations but in-line with trends. Stock at 0.8x FY19 ABV remains attractive especially post recent correction and with no large impact from floods & risk of corporate slippage...

SIB operating performance disappointed with high slippages leading to lower NII growth of 7% YoY, slower fees coupled with lower treasury gains and continued provisioning. Asset quality was under pressure with high slippages of Rs6.1bn from corporate and from SME as well. Management's take on the slippages was the difficult working environment for the SMEs especially in food processing, commodities and trading sector and hence...

South Indian Bank (SBL) reported 1QFY19 results with the key strategic takeaways being: (1) SBL applied the concept of inherent weakness conservatively leading to total slippages of Rs 6.06bn but management has guided for Rs 6-7bn slippages over the remainder of FY19 (2) Core fee income growth was tepid due to the absence of PSLC income (~Rs 200mn in 1QFY18) (3) Hit from (a) gratuity revision (Rs 204.5mn) and (b) MTM loss (Rs 343mn) that remained unamortized as of 4QFY18 were, conservatively, fully absorbed (4) NIM contracted ~10 bps QoQ and ~20 bps YoY to 2.6% but management guided for NIM reversion to 2.8% in ~6 months on the back of MCLR resets. (See comprehensive conference call takeaways on page 2; see initiating coverage report here). Per...

Sector: Banking /Mid-Cap | Earnings Update 1QFY19 Background: South Indian Bank (SIB), among the mid-sized banks in the private sector space, operates a network of about 855 branches and about 1,386 ATMs. The bank's business is largely skewed towards the Southern state with half of its branches located in Kerala. SIB has established a strong brand recall among the Keralite-NRI Diaspora. With no identifiable promoters SIB is run by a team of professionals. As of 1QFY19 the bank had deposits of ~INR 725bn and a loan book of ~INR 562bn. The bank looks to add a...