South Indian Bank back in black on lower provisioning

South Indian Bank on Friday reported a net profit of Rs 6.79 crore for the fourth quarter of FY21, against a loss of Rs 143.69 crore in the year-ago period, largely because of lower provisioning for bad loans. Provisions and contingencies for the fourth quarter stood at Rs 412.29 crore, compared with Rs 723.80 crore in the corresponding period of FY20 and Rs 499.48 crore in Q3 of FY21.

The Thrissur based lender had reported a net loss of Rs 91.62 crore during the third quarter of FY21. For the whole FY21, the bank has reported a net profit of Rs 61.91 crore, against Rs 104.59 crore in FY20.

The asset quality deteriorated, with GNPA ratio seen at 6.97%, compared to 4.90% in the preceding quarter and 4.98% in the year-ago period. Net NPA ratio for Q4 was at 4.71%, against 2.1% in Q3 and 3.34% in Q4 of FY20.

The provision coverage ratio improved from 54.22% to 58.73% on a year-on-year (y-o-y) basis.

Murali Ramakrishnan, MD & CEO, said the bank has been able to meet the targeted levels of recovery or upgrades which have helped in containing the GNPA level despite higher slippages during the year on account of Covid.

He added that the lower quarterly profit was mainly on account of credit cost on the fresh slippages during the fourth quarter, as a result of additional stress in the economy due to the pandemic.

The capital adequacy ratio stood at 15.42% as on March 31, 2021. The lender raised Rs 240 crore during the quarter which strengthened the common equity.

Total deposit base at the end of the March quarter is seen higher by 9% y-o-y at Rs 69,827 crore, while advances declined by 9% to Rs 59,418 crore.