South Indian Bank Posts 12% Jump In Gross Advances In December Quarter

South Indian Bank Ltd.'s gross advances jumped 11.94% on a yearly basis to Rs 86,965 crore in the October-December quarter, according to the provisional quarterly business update filed with the exchanges on Wednesday.

The bank reported a 6.28% growth in deposits at Rs 1.05 lakh crore in the second quarter, as compared to Rs 99,155 crore in the same period last year.

The CASA ratio—the proportion of deposits that come from low-cost current and savings accounts—fell to 31.16% from 31.80% in the year-ago quarter. A higher CASA ratio indicates a lower cost of funds since lenders do not usually give any interest on current account deposits, and the interest on savings accounts is low.

The bank's core net interest income during the second quarter had grown by 6% to Rs 882 crore. The net profit for the September quarter stood at Rs 325 crore, up 18.2% year on year. The lender's other income rose to Rs 449.47 crore, compared to Rs 355.77 crore in the corresponding quarter a year ago.

On the asset quality front, the proportion of gross non-performing assets stood at 4.4%, lower as compared to 5.13% in the year-ago period. Operating margin for the quarter expanded to 19.62%, as against 18.55% a quarter ago and 18.53% in the year-ago period.

South Indian Bank stock rose as much as 0.72% during the day to Rs 25.20 apiece on the NSE. The stock closed 0.52% higher at Rs 25.15 per share. This compares with a 0.41% advance in the benchmark Nifty 50. It has risen 1.97% in the last 12 months.

Out of the seven analysts tracking, five have a 'buy' rating on the stock and two recommend a 'hold,' according to Bloomberg data. The average 12-month Bloomberg analyst consensus price target implies a potential upside of 42.1%.