The South Indian Bank Limited held an analyst/investor conference call on May 16, 2025, to discuss its financial results for Q4 and the full fiscal year 2024-25. Key management, including MD & CEO Mr. P. R. Seshadri, participated.
- FY 2024-25 Performance Highlights:
- Net profit stood at ₹1,303 crore, a 22% increase from ₹1,070 crore in the previous fiscal.
- Total deposits grew 6% year-on-year to ₹107,526 crore.
- Retail deposits (excluding bulk) increased by 7% to ₹104,750 crore.
- Gross advances grew 9% to ₹87,579 crore (around 10% including technical write-offs).
- Net Interest Margin (NIM) for the year was 3.24%.
- Return on Assets (RoA) was 1.05%, and Return on Equity (RoE) was 12.9%.
- Gross NPA reduced by 130 basis points to 3.2%, and Net NPA reduced by 54 basis points to 0.92%.
- Provision Coverage Ratio (PCR) improved to 71.77% (excluding write-off) and 85.03% (including write-off).
- CASA balances grew 3% to ₹33,730 crore.
- Q4 FY 2024-25 Performance Highlights:
- Net profit for the quarter was ₹342 crore (compared to ₹288 crore in Q4 FY'24).
- Operating profit increased 57% year-on-year to ₹683 crore.
- Net Interest Income (NII) was ₹868 crore.
- NIM for the quarter was 3.21%.
- RoA and RoE for the quarter were 1.11% and 13.74%, respectively.
- Slippage ratio was 0.24%.
- Business Segment Performance & Strategy:
- Gold loan book grew 9% YoY to ₹16,982 crore.
- Home loans saw 55% YoY growth, and Auto loans grew 24% YoY.
- The MSME book stabilized after a period of shrinkage; expects significant growth in FY'26.
- Loan Against Property (LAP) is underwritten based on cash flows with an average LTV of 60-70% and minimum ticket size around ₹50 lakh; credit underwriting is automated.
- Management Outlook & Guidance for FY 2025-26:
- Targeting advances growth north of 12%, with potential to exceed this by 3-4 percentage points, driven by MSME and retail segments.
- Expects total deposit growth to be north of 10%.
- CASA growth is expected to be significantly better than the previous year.
- RoA is expected to remain in the 1% range in the near term, with potential to increase later.
- NIM guidance is difficult due to interest rate volatility.
- Actively managing the balance sheet to cycle out of lower-yielding corporate loans into higher-yielding retail and MSME assets.
- Evaluating setting up an arm to actively distribute third-party wealth products.
- Awaiting clarity from RBI on the recent draft circular regarding gold loans; business continues as usual for now but changes may be required.
- Discussed the Branch Value Added (SVA) metric as a measure of the expected Net Present Value of future cash flows generated from new products sold by branches.