Higher other income boosts South Indian Bank's Q1 earnings by 9%, reaching Rs 322 crore
South Indian Bank has reported a robust performance in its Q1 FY26 financial results, marking a significant year-on-year improvement. The bank's net profit surged by 9.5% to approximately ₹322 crore, up from ₹294 crore in Q1 FY25.
Total income increased to ₹2,984 crore from ₹2,736 crore, supported by higher interest income which grew modestly to ₹2,362 crore from ₹2,314 crore in the year-ago quarter. Operating profit surged 32% to ₹672 crore from ₹508 crore, indicating much stronger operational efficiency.
The bank's asset quality improved markedly, with Gross Non-Performing Assets (GNPA) declining to 3.15% of gross advances from 4.5%, while Net NPAs dropped to 0.68% from 1.44% in the previous year. Provision Coverage Ratio reached a record 88.82%, indicating strong provisioning buffers. The capital adequacy ratio also rose from 18.11% to 19.48%, providing a stronger capital base for future growth.
In terms of business growth, the bank achieved its highest-ever total business volume of ₹2.02 lakh crore. Gross advances grew 8% YoY to ₹89,198 crore, with outstanding growth in retail segments. Personal loans rose 26% to ₹24,222 crore, housing loans more than doubled, growing 66% to ₹8,518 crore, vehicle loans increased 27%, and gold loans grew 7% to ₹17,446 crore.
Total deposits expanded 9% to ₹112,922 crore, reflecting healthy deposit growth supporting the lending expansion. The Capital Adequacy Ratio (CASA) ratio remained stable at 32.06%.
The key growth drivers for South Indian Bank in Q1 FY26 include strong retail loan growth, improved asset quality, higher operational efficiency, a robust capital position, and deposit growth. These factors contributed to the bank's robust earnings, signalling positive momentum in both business expansion and financial stability.
It is worth noting that the CASA deposits increased 9.06% to ₹36,204 crore, and the bank's interest expenses rose at a faster pace of 5% to Rs 1,529 crore. Interest income grew a modest 2% year-on-year to Rs 2,362 crore, and other income for the quarter was Rs 621.89 crore, primarily driven by a 47% jump in other income.
Gross advances for Axis Bank also rose 8% year-on-year to Rs 89,198 crore, and the bank's total business reached Rs 2.02 lakh crore as of June 30. However, this resulted in a 3.83% decline in net interest income, which stood at Rs 833 crore for the quarter. The retail deposit growth in India outpaced credit growth, rising 9.65% to ₹1.09 lakh crore. Personal loans for Axis Bank increased 26% to Rs 24,222 crore, and housing loans for Axis Bank increased 66% to Rs 8,518 crore.
In conclusion, South Indian Bank's Q1 FY26 financial performance reflects strong growth and improved asset quality, driven by multiple key factors. The bank's robust earnings signal positive momentum in both business expansion and financial stability.
- The bank's strong performance in investing and business can be attributed to its key growth drivers such as significant retail loan growth, improved asset quality, higher operational efficiency, a robust capital position, and deposit growth.
- The South Indian Bank's financial results for Q1 FY26 highlight a Year-on-Year (YoY) surge in net profit, total income, and operating profit, demonstrating the bank's strength in both the finance and banking sectors.
- The declining Gross Non-Performing Assets (GNPA) and Net Non-Performing Assets (NPA) indicate the bank's success in the Defi (decentralized finance) market, thereby ensuring strong provisioning buffers and a healthier business outlook.
- The banks' total business volume achieved its highest-ever level, thanks in part to the expansion of various loan segments like personal loans, housing loans, vehicle loans, and gold loans, emphasizing the bank's commitment to the growing market and focusing on diverse investing opportunities.
