Thrissur-based South Indian Bank expects its gross non-performing asset ratio (GNPA) to fall to 4% by March 2025 from 4.5% currently.

“We have not done any active write-offs. We are working on what we currently have. We are hoping that we would be in the neighbourhood of 4% at the end of FY25,” managing director and chief executive officer PR Seshadri said. The GNPA ratio stood at 5.14% a year ago.

The net profit of the bank fell 13.9% year-on-year (y-o-y) to `287.6 crore in the March quarter due to sharp rise in expenses.
“Our expenses rose considerably on account of the cost of IBA wage settlement fee. As a consequence, our net income dropped in January-March period. However, underlying momentum (growth) is positive,” he said.
Overall, the bank’s gross advances rose nearly 12% y-o-y to `80,426 crore as on March 31, driven by a growth in corporate loans.

“Going forward, we want to be a bit more granular so we want to grow our personal loan segment and MSME. Not go as aggressive in corporate as we have done so far,” he said.

Retail deposits rose 9.1% y-o-y to Rs 97,743 crore. Current deposits rose 21.8% y-o-y to Rs 6,075 crore. Savings deposits rose 5.5% y-o-y to Rs 26,618 crore. The share of low-cost current account savings account (CASA) ratio fell to 32.1% as on March 31 from nearly 33% a year ago.

Net interest income, which is the difference between interest earned and expended rose 2% y-o-y to nearly Rs 875 crore in the March quarter.

The bank’s net interest margin rose 19 basis points (bps) y-o-y to 3.38% in January-March quarter. Going ahead, the company intends to increase its margins by ramping up disbursements in the personal loan and MSME segment.

“In the next 18 months, we want to aim for a NIM of 3.5% by changing our product mix. This will change the structure of our balance sheet. In the long-term, we want to get to 4%,” he said.