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ICICI Securities Report
South Indian Bank Ltd., post the onboarding of new Managing Director in September 2020, focused on growing the balance sheet in a calibrated manner with prime focus on net interest margin and asset quality.
It has since churned ~50% of overall loan book, and operating metrics in the new book (originated post-Sep-20) are at par with industry standard.
Gross non-performing loan in the new book is at only 0.03% with special mention account-II at 0.3% and net interest margin at 3.60%.
Within the corporate segment, ‘A & above' rated corporates now account for 93% of the total segmental loans versus 66% in Sep-20.
Notably, South Indian Bank delivered an average return on asset of 0.80% in past three quarters with provision coverage ratio (excluding write-offs) improving to 57% versus 44% in Q2 FY22.
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