South Indian Bank books Q3 loss at Rs 92 cr over Covid-related slippages

CEO sees quarterly loss mainly on account of stress in the economy due to the coronavirus pandemic.

South Indian Bank (SIB) reported a net loss of Rs 92 crore in the quarter ended December 2020, compared to Rs 91 crore during the same period a year ago.

"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," said Murali Ramakrishnan, MD & CEO of the Bank, adding that there was one time additional employee provision requirement on account of the wage settlement that was finalised during the quarter.

"Despite the Covid Pandemic scenario, the bank could register a moderate growth in the desired segments during the period. As part of the business strategy to reduce the exposure in the corporate advances, bank has brought down the share to 24 per cent from 30 per cent as on December 31," he said

"Growth in the desired portfolios and reduction in the corporate exposure has further strengthened Bank’s Balance sheet." 
 

Interest earned by the bank stood at Rs 1,811.96 crore as compared to Rs 1,967.31 crore.

"The bank has been able to meet the targeted levels of recovery/ upgrades, that helped in keeping the gross non performing asset (GNPA) in check. The provision coverage ratio of the bank has improved markedly to 72 per cent from 50 per cent year-on-year. The bank's capital adequacy ratio (CAR) stood at 14.47 per cent as on December 31, 2020. It has taken approval from the shareholders for raising the equity capital during the financial year for an amount not exceeding Rs 750 Crore," Ramakrishnan said.

Gross NPAs dropped to 4.90 per cent from 4.96 per cent, while Net NPAs of the Bank eased to 2.12 per cent from 3.44 per cent.

Commenting on the outlook, Ramakrishnan said: "The bank has come up with a 3 year medium term strategy (vision 2024) where in the bank’s focus will continue in the areas of micro, small and medium enterprises (MSMEs) and retail loans with improved underwriting standards. The technology initiatives of the bank will be leveraged to improve the CASA and the Technology Income in the coming quarters. Thrust will be given on competency building of the work force through career development programmes, leadership and skill development training etc. As per the strategy, the bank’s return on assets (RoA) and NIM will be crossing 1 per cent and 3.5 per cent respectively by the financial year 2024."