South Indian Bank Q2 FY26 Net Profit Increases 8.2% to ₹351.37 Crore; Asset Quality Improves Further

Thrissur, October 16, 2025 – The South Indian Bank Ltd (NSE: SOUTHBANK, BSE: 532218) reported a net profit of ₹351.37 crore for the quarter ended September 30, 2025, marking an 8.2% year-on-year (YoY) growth compared to ₹324.69 crore in Q2 FY25. The increase was primarily driven by higher interest income and improved asset quality, though operating cost pressures partly offset gains.

Financial Performance Overview

For the quarter, the bank’s overall income grew 5.7% to ₹2,92,278 lakh from ₹2,76,484 lakh during the corresponding period of the previous year. Interest income rose 2.2% year on year to ₹2,40,705 lakh, helped by consistent credit growth. Other income reported a strong increase to ₹51,573 lakh from ₹41,012 lakh in the previous year, driven by stronger treasury operations and fee-based businesses.

Even with this growth, operating profit decreased 2.7% to ₹53,556 lakh owing to increased costs, although reduced provisioning expenses—42.5% lower at ₹6,327 lakh—increased pre-tax profits. Profit before tax was at ₹47,229 lakh, down from ₹44,024 lakh in Q2 FY25, a 7.3% increase.

Asset Quality Shows Notable Improvement

South Indian Bank continued to improve its balance sheet with the asset quality indicators registering a big improvement. Gross NPA reduced to ₹2,70,347 lakh from ₹3,73,131 lakh during the previous year, down by 27.6%. Net NPA fell 52.9% to ₹50,582 lakh from ₹1,07,310 lakh in Q2 FY25.

As a percentage, Gross NPA to Gross Advances declined to 2.93% from 4.40%, and Net NPA to Net Advances rose to 0.56% from 1.31%—a creditable 75-basis-point decline. The capital adequacy ratio as per Basel III guidelines continued to be healthy at 17.70%, and the annualized Return on Assets (RoA) remained unchanged at 1.04%.

Half-Yearly Highlights

The bank posted a total income of ₹5,90,711 lakh during the first half of FY26, which rose by 7.4% from ₹5,50,097 lakh during H1 FY25. Operating profit was up 14.1% at ₹1,20,776 lakh and net profit grew by 8.8% to ₹67,332 lakh. The bank had a good liquidity position with the total asset and net worth each at ₹10,22,068 lakh as of September 30, 2025.

Segment-Wise Performance

Retail banking remained the biggest source of revenues with almost 45% of overall income, as revenue increased to ₹1,30,180 lakh from ₹1,18,473 lakh. Profit before tax in the segment was ₹24,412 lakh. The corporate and wholesale banking segment brought in ₹82,162 lakh of revenue and ₹6,083 lakh of profit, showing strategic concentration on high-quality lending.

The treasury business added ₹68,459 lakh to revenue and ₹12,106 lakh to profit with favorable movement in the markets. Other banking businesses added ₹11,477 lakh to revenue and ₹4,628 lakh to profit with steady performance by all segments.

Consolidated Results

Consolidated performance saw the bank post total income of ₹2,92,257 lakh, up 5.7% year-on-year. Operating profit was at ₹53,585 lakh, and net profit was higher by 8.3% at ₹35,159 lakh. The basic and diluted EPS increased to ₹1.34 from ₹1.24 in the previous year, reflecting steady profitability. SIB Operations and Services Ltd, the subsidiary of the bank, contributed marginally to the consolidated performance.

Management Commentary

P. R. Seshadri, Managing Director & CEO of South Indian Bank, said, “The second quarter shows our consistent effort towards balance sheet strength, enhancing asset quality, and profitability. Disciplined credit practices and effective liability management helped maintain margins in a competitive scenario.”

Strategic and Capital Developments

In the quarter, the bank prematurely redeemed ₹490 crore of Tier-II bonds in September 2025, underlining its robust capital position. Further, 4,09,941 shares were issued under the Employee Stock Option Scheme (ESOS), underlining employee interests further aligned with long-term growth aspirations. Auditors gave an unmodified review report on standalone and consolidated financial statements, upholding belief in the accounting integrity of the bank.

Established in 1929 with its headquarters in Thrissur, Kerala, The South Indian Bank Ltd is India’s oldest private sector bank, with a diversified portfolio in retail, corporate, treasury, and digital banking segments. Listed on NSE (SOUTHBANK) and BSE (532218), the bank continues to maintain robust capital adequacy and consistent profitability supported by cautious risk management and technology-enabled operations.

Stocks of South Indian Bank have been stable against the overall market volatility due to its steady earnings, enhanced asset quality, and strategic efforts towards sustainable growth.

REF: http://nsearchives.nseindia.com/corporate/SOUTHBANK_16102025133258_SD_STT_FINANCIALRESULTS_Q2_SEP2025.pdf

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