Money & Banking

South Indian Bank net profit slips on higher credit cost

Our Bureau Kochi | Updated on July 22, 2021

Prevailing Covid situation affects the banks’s prospects

Higher credit cost had its impact on the profitability of South Indian Bank in the first quarter of FY22. The bank has posted a net profit of ₹10.31 crore in Q1 compared to ₹81.65 crore in the corresponding period of the previous year.

However, the operating profit has registered a 26.86 per cent growth in Q1 at ₹512.12 crore as against ₹403.68 crore during the corresponding period of the previous year.

Murali Ramakrishnan, MD & CEO said that slippages during the quarter was on the higher side by which the gross NPA and net NPA stood at 8.02 and 5.05 per cent, respectively, as on June 30 in view of Covid scenario, affecting various sectors.

Also read: South Indian Bank posts net profit of nearly ₹7 crore in Q4

Meanwhile, during this quarter, the bank could improve the Provision Coverage Ratio to 60.11 per cent as on June 30 as against 58.73 per cent as on March 31.

The bank has strengthened the review and monitoring system of the advance portfolio to improve the credit quality and thereby bringing drastic reduction in the slippages and improving upgrades/ recovery, he added.

The prevailing Covid scenario impacted the growth in the business and personal loan segment. While the bank could register substantial growth in the desired segments such as gold loan portfolio during the period, the strategy to reduce lumpy advances continued and share of corporate advances stands at 24 per cent of total advances as on June 30, he said.

The Capital Adequacy Ratio of stands comfortable at 15.47 per cent as on June 30. The bank plans to raise additional capital during FY 21-22 to further strengthen the capital base, he said.

Published on July 22, 2021

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