Money & Banking

South Indian Bank posts loss of ₹91.62 crore in Q3

Our Bureau. Kochi | Updated on January 21, 2021

Higher credit cost has made a dent on South Indian Bank’s profitability in the third quarter of FY21. The Thrissur-based lender has registered a net loss of ₹91.62 crore against a net profit of ₹90.54 crore in the corresponding period of the previous year.

Murali Ramakrishnan, Managing Director and CEO, said that the quarterly loss was mainly on account of credit cost on the higher proforma slippages during the third quarter, as a result of additional stress in the economy due to Covid pandemic. Further, there was a one-time additional employee provision requirement on account of the wage settlement which was finalised during the quarter.

The interest reversal of ₹73 crore, conservative provisioning of ₹55 crore from a fraud account, and the provision of security receipts, are also contributing factors that led to the reduction in net profit, he said.

Despite the Covid pandemic, he said the bank could register a moderate growth in desired segments. As part of the business strategy to reduce the exposure in the corporate advances, the bank has brought down the share of corporate advances from 30 per cent as on December 31, 2019, to 24 per cent as on December 31, 2020. The growth in the desired portfolios and the reduction in the corporate exposure have further strengthened the balance sheet, he added.

The bank has also been able to meet the targeted levels of recovery/ upgrades, which has helped in containing the GNPA level. The provision coverage ratio has improved markedly to 72 per cent from 50 per cent, he said.

The capital aadequacy ratio stands comfortable at 14.47 per cent as on December 31, 2020. According to him, technology initiatives will be leveraged to improve the CASA and technology income in the coming quarters. As per the strategy, the Return on Assets and NIM will cross 1 per cent and 3.5 per cent, respectively, by the financial year 2024.

Published on January 21, 2021

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