Shares of South Indian Bank nosedived on January 30, after the lender disclosed that its Managing Director and Chief Executive Officer, P.R. Seshadri will not seek a second term once his current tenure ends.
The stock dropped as much as 18% during the session before recovering slightly, making it the steepest single-day fall since the bank’s listing in 2006. However, South Indian Bank shares recovered marginally midmorning but the stock is still down 12.43% intra-day.
Decision communicated to board
The bank said Seshadri informed the board of his decision during a meeting held on January 29. He cited personal interests as the reason for not seeking re-appointment. Despite the announcement, he will continue in his role until September 30, 2026, when his current term comes to an end.
According to the bank’s filing, the board has begun the process of identifying a successor. This includes shortlisting suitable candidates and completing approvals required from the Reserve Bank of India and the bank’s shareholders before making the final appointment. The bank said the transition has been planned to ensure continuity in leadership until a new MD and CEO takes charge.
Strong quarterly numbers before sell-off
The market reaction comes shortly after South Indian Bank reported its strongest quarterly performance to date. The lender posted a net profit of Rs 374.32 crore for the December quarter of FY26, a 9% rise from Rs 341.87 crore a year earlier, as per its January 15 press release .
Net interest income increased 1.3% year on year to Rs 881 crore, while non-interest income grew 19% to Rs 485.93 crore. Pre-provisioning operating profit rose 10% to Rs 584.33 crore, supported by higher fee income and controlled operating expenses.
For the nine months ended December 2025, cumulative net profit stood at Rs 1,047.64 crore, compared with Rs 960.69 crore in the same period last year.
Asset quality and balance sheet position
South Indian Bank also reported continued improvement in asset quality. Gross non-performing assets declined to 2.67% from 4.30% a year ago, while net NPAs eased to 0.45% from 1.25%. Provision coverage, including write-offs, improved to 91.57%.
While announcing the results, PR Seshadri, MD & CEO of the Bank, stated that the Bank’s well-defined strategy continues to underpin its strong business performance during the period. The Bank recorded healthy growth across all major segments – including Corporate, MSME, Housing, Auto and Gold loans – with a steadfast focus on maintaining asset quality.
Deposits grew 13% year on year to Rs 1.15 lakh crore, driven by gains in retail and NRI deposits. CASA deposits rose nearly 15%, while the capital adequacy ratio stood at 17.84% as of December 2025.