SOUTHBANKNSEQ4 FY26May 13, 2026

The South Indian Bank Limited

9,374words
117turns
15analyst exchanges
8executives
Management on call
P.R. Seshadri
MANAGING DIRECTOR AND CHIEF
Dolphy Jose
EXECUTIVE DIRECTOR – SOUTH INDIAN BANK LIMITED
Anto George
CHIEF OPERATING OFFICER AND
Vinod Francis
SGM AND CHIEF FINANCIAL OFFICER – SOUTH INDIAN BANK LIMITED
Jimmy Matthew
SGM AND COMPANY SECRETARY – SOUTH INDIAN BANK LIMITED
Senthil Kumar
HEAD OF CREDIT – SOUTH INDIAN BANK LIMITED
Sony A.
CGM - CHIEF INFORMATION OFFICER – SOUTH INDIAN BANK LIMITED
Amansingh Sahajsinghani
ICICI SECURITIES
Key numbers — 40 extracted
rs,
aging Director and CEO. I'm joined here by my colleagues that were introduced earlier and two others, Mr. Senthil Kumar, who is our Head of Credit, and Mr. Sony, who is our Chief Information -- CIO. A
INR1,455 crore
or the financial year 2025 to 2026. The bank declared its highest ever net profit for the year at INR1,455 crores for the financial year 2025-2026, which implies a growth of 12% compared to INR1,303 crores in t
12%
rofit for the year at INR1,455 crores for the financial year 2025-2026, which implies a growth of 12% compared to INR1,303 crores in the prior year. Total deposits grew by 15% to INR1,23,346 crores f
INR1,303 crore
ar at INR1,455 crores for the financial year 2025-2026, which implies a growth of 12% compared to INR1,303 crores in the prior year. Total deposits grew by 15% to INR1,23,346 crores from INR1,07,526 crores. Ret
15%
ich implies a growth of 12% compared to INR1,303 crores in the prior year. Total deposits grew by 15% to INR1,23,346 crores from INR1,07,526 crores. Retail deposits, excluding bulk deposits, grew by
INR1,23,346 crore
lies a growth of 12% compared to INR1,303 crores in the prior year. Total deposits grew by 15% to INR1,23,346 crores from INR1,07,526 crores. Retail deposits, excluding bulk deposits, grew by 15% to INR1,20,116 cr
INR1,07,526 crore
pared to INR1,303 crores in the prior year. Total deposits grew by 15% to INR1,23,346 crores from INR1,07,526 crores. Retail deposits, excluding bulk deposits, grew by 15% to INR1,20,116 crores from INR1,04,750 cr
INR1,20,116 crore
1,23,346 crores from INR1,07,526 crores. Retail deposits, excluding bulk deposits, grew by 15% to INR1,20,116 crores from INR1,04,750 crores. Gross advances grew by 14.5% to INR1,00,274 crores from INR87,579 crore
INR1,04,750 crore
1,07,526 crores. Retail deposits, excluding bulk deposits, grew by 15% to INR1,20,116 crores from INR1,04,750 crores. Gross advances grew by 14.5% to INR1,00,274 crores from INR87,579 crores. During the last fin
14.5%
bulk deposits, grew by 15% to INR1,20,116 crores from INR1,04,750 crores. Gross advances grew by 14.5% to INR1,00,274 crores from INR87,579 crores. During the last financial year, we have done a techn
INR1,00,274 crore
osits, grew by 15% to INR1,20,116 crores from INR1,04,750 crores. Gross advances grew by 14.5% to INR1,00,274 crores from INR87,579 crores. During the last financial year, we have done a technical write-off to the
INR87,579 crore
R1,20,116 crores from INR1,04,750 crores. Gross advances grew by 14.5% to INR1,00,274 crores from INR87,579 crores. During the last financial year, we have done a technical write-off to the extent of INR1,163 cr
Guidance — 20 items
Amandeep Singh S.
opening
“On behalf of ICICI Securities, we welcome you all to Q4 FY26 post-earnings conference call of South Indian Bank.”
P.R. Seshadri
opening
“The net profit for the quarter was INR408 crores compared to INR342 crores during Q4 FY25.”
Unmesh Shah
qa
“If you can elaborate or if I am not too inquisitive, I will be happy if you can throw some light on this.”
P.R. Seshadri
qa
“So I guess the process is, to reiterate, the process is underway and we should expect communication from the bank, from the Board through the bank, at an appropriate point in time.”
P.R. Seshadri
qa
“The Board is cognizant of that, and I am sure that the outcomes will be, you know, the process will conclude and letters will be written to the RBI in due time for RBI to make its decisions and convey them to the Board in such a fashion that the new incumbent can be in position when required, which is, my term ends on the 30th of September.”
P.R. Seshadri
qa
“And I expect that all of this will happen in such a fashion that the new incumbent can be in position before or immediately after the end of my term.”
P.R. Seshadri
qa
“Now, of course, if the price of gold were to dip by more than that, then there will be some incremental hit to the bank.”
P.R. Seshadri
qa
“Because ultimately, if the price of gold goes from INR15,000 to INR10,000 and that is what it has historically done -- historically, let us say the maximum peak-to-trough has been 30% -- then we can then try and model how much of my portfolio will be at risk and then cap it.”
Dolphy Jose
qa
“That will continue, and we intend to have concentrated resource allocation and avoid width and go after depth in the geography where we are moved recently and develop markets.”
Sandeep Joshi
qa
“So, in this context, at what rate do we intend to grow our loan book in FY '27, assuming gold might not contribute so significantly the way it did in FY '26?”
Risks & concerns — 15 flagged
So whilst the environment has been difficult and growing revenues have proven to be difficult, we've managed to ensure that jaws from an operating efficiency point of view, the jaws have opened up.
— P.R. Seshadri
I saw that in the numbers the other income had some significant decline this last quarter.
— Siddharth Gollapudi
So on the I mean, what is the risk mitigation on the gold loan at the higher end of the -- when the gold prices are higher?
— Jai Prakash Mundra
So during the year we’ve had to understand how to measure this risk.
— P.R. Seshadri
In gold, the risk is basically price volatility of gold itself is the risk.
— P.R. Seshadri
So as a bank we’ve put together, we are using the Value at Risk framework, and we’ve built a mechanism by which we actually measure this risk.
— P.R. Seshadri
And using Value at Risk, we can see periods of volatility.
— P.R. Seshadri
And if we were to stress test our portfolio for that period of volatility, what is the portfolio that gets exposed as a consequence?
— P.R. Seshadri
And that's the mechanism by which we are actually managing gold loan risk.
— P.R. Seshadri
So, at a portfolio level, we have a Value at Risk metric which tells me how much risk I am running.
— P.R. Seshadri
Anything of that sort or, you know, you have like what you mentioned VaR sort of an approach for risk mitigation?
— Jai Prakash Mundra
So, we apply a proportion, instead of applying one full standard deviation, we either apply 50% or 25% standard deviation to partially mitigate this risk.
— P.R. Seshadri
But what I was trying to tell you was how we manage risk at a portfolio level.
— P.R. Seshadri
Because ultimately, if the price of gold goes from INR15,000 to INR10,000 and that is what it has historically done -- historically, let us say the maximum peak-to-trough has been 30% -- then we can then try and model how much of my portfolio will be at risk and then cap it.
— P.R. Seshadri
At a VaR level, we can say that I want -- I don’t want more than let's say 10% or 8% of my total capital should ever be at risk.
— P.R. Seshadri
Q&A — 15 exchanges
Q
Thank you very much, sir, for giving me opportunity to attend this con-call and congratulations once again for the good set of numbers. Your CASA, NPA, all have come to a very good set of numbers, sir, and also this capital adequacy ratio and everything is in line. Sir, my question is now, sir, that you know you have decided not to go for the second term or extension. Is there any search operation going for succession plan for the bank or what is the new thing going on or how much time will it take or it may be internal person or from outside search is going on? If you can elaborate or if I am
P.R. Seshadri
The Board is actively engaged in the search process. I can confirm that the search process is on. And the Board is fully cognizant of the need to ensure that this is done expeditiously and names communicated to RBI within the timeframe that is required. And I am certain that the board would be updating shareholders as well as investors and others at the appropriate point in time once an outcome has been reached. So I guess the process is, to reiterate, the process is underway and we should expect communication from the bank, from the Board through the bank, at an appropriate point in time.
Q
Hi, sir. Thank you so much for the opportunity to ask a question. First of all, congratulations on the great numbers. Sir, I had the similar question to what the first questioner asked, but I also have another question. I saw that in the numbers the other income had some significant decline this last quarter. So I just want to know what is the reason and is there any, in future, what are we going to do to ensure that the other income is also consistent to the previous quarters? Thank you, sir.
P.R. Seshadri
I'll request my colleague, our CFO, to answer that question. Post his answer, I'll give you context on how we think that we can regrow or start growing that revenue stream. So over to you, Vinod. Thank you, sir. Am I audible?
Q
Yeah, hope I am audible now.
Management
Q
So the dip in the other income is mainly because of the Treasury because in Q4, due to the market conditions, we were not able to generate much income over in the Treasury segment. So in Q3, we had an income of around INR77 crores, so that is almost nil in Q4. So that is the major element of dip in the other income.
P.R. Seshadri
Thanks, Vinod. To further address your query, we are branching out from Corporate into the Retail and MSME side of the house. And we are doing a lot of work to broaden out the fee base that we have as an institution. And the revenue stream that you can get, non-interest revenue that you can get on Retail and MSME, is significantly larger than what you can actually get on the Corporate side. And as that grows out, we think that automatically the revenue streams here will improve. Thank you. My apologies for the fact that we inadvertently left the call. I was trying to explain that the non-inter
Q
Yeah, hi. Am I audible?
Management
Q
Yes, Jai, we can hear you.
Jai Prakash Mundra
Sure. Sir, just a question on -- while you mentioned that the Board has taken the succession thing, but any timeline, sir, as to what are the timeline and what are the processes? I mean, when does the search completes and when does the name go to RBI? Any broad timeline, sir? Jai, I think we are aware of the fact that RBI requires a certain amount of time for the approval processes. The Board is cognizant of that, and I am sure that the outcomes will be, you know, the process will conclude and letters will be written to the RBI in due time for RBI to make its decisions and convey them to the B
Q
Yeah, thank you for the opportunity. So, my first question was on the write-off that 1,163 crores of write-off. How was this accounted for? Can you just explain that briefly, please?
P.R. Seshadri
Sure. I’ll turn this over to our CFO, Mr. Vinod Francis, to answer this. Yes, sir. Sir, with this regard to this write-off 1,163, so these all these accounts have already been 100% provided. Provisions have already been created. So, we are doing the technical write- off. It is not the actual bad debt write-off, but a technical write-off. So, the there is no impact in the P&L, but the only impact that comes is in the PCR. Got it. So, this reduced your GNPA, but your NNPA was not affected by this. Not affected by the technical write-off. Okay. I’m probably going to ask take this offline with you
Q
Hi, sir. Thanks for the opportunity and congratulations for the good set of numbers. Sir, I had a couple of questions. Firstly, on the loan growth. So, you’ve grown our loan book at a healthy rate of around mid-teens during this financial year despite the write-off of about more than INR1,000 crores. And the heavy lifting was done by gold loans. So, in this context, at what rate do we intend to grow our loan book in FY '27, assuming gold might not contribute so significantly the way it did in FY '26? That's the first question.
P.R. Seshadri
Yeah, okay. Thank you, Sandeep. We think that we at the very least we'll grow at the industry rate. So, I mean going forward our aim is that if the industry grows at X, we'll grow at X. But we are a smaller institution, and therefore, you know, whatever be the vicissitudes of the industry, we should be able to carve a path for ourselves which is different. So, I understand that the current view is that next year loan growth may be a little shallower than last year's loan growth, but having said that, we are still aiming to get between 15% and 16%. But if the industry were to do higher than tha
Q
Yes, hi, sir. Thanks a lot for the opportunity. So, my first question is what would be the NIM drivers going into FY27 considering, we may see a rate hike maybe at the fag end of the calendar year or the fiscal year.
P.R. Seshadri
The NIM drivers for us are largely change in asset mix, is the biggest driver. So, if we can get more larger proportion of our book to be Retail and MSME, automatically NIMs open up because on the corporate side we are dealing with very, very high-quality corporates and there the NIMs are very, very low. So product mix change is the biggest driver of NIM. The other driver of NIM for us is going to be rate hikes. So on the way down, we were the most impacted institution essentially because of the fact that we give effect to an RBI rate change on a T+1 basis. So if repo rate changes today, we gi
Q
Thanks for the opportunity. Congratulations on a good set of numbers. So, my first question is like we note that the old book accounted for around 12% of the gross advances as of FY26. So, when do you expect the old book to completely run down?
P.R. Seshadri
Some of these loans are I think working capital facilities which they do annually renew. you know, the way we are seeing this today is that the old book has become quite a small proportion of the total book and therefore maybe the distinction between the old and the new is perhaps outliving its utility. So, we are internally debating whether we need to do this segregation at this point in time or not because our losses across the board are so low, I mean our slippage rate for the for the quarter was only 15 basis points. Whilst a substantial sizeable portion of that did come from the old book,
Q
Yes, thanks for the opportunity and congrats on good set of numbers. So, first question is basically you know if I see last few years bulk of the growth has basically come from our existing branches. So, from next leg of growth perspective, do we need to add branches or would we look to continue optimize our existing network? How do you see it?
P.R. Seshadri
It's a very good question. We've been, you know, we started out with high cost-to-income ratios and our view was that we need to become more profitable by sweating assets that we have and make them more efficient. Our view is that we've now, you know, our total value addition from the branches have doubled over the last eight or nine quarters. There is still some runway there and we can get more and that requires us to redo our processes and ensure that our systems are, you know, even more efficient so that ease of doing business improves. So that thing we will continue to do. We are also buil
Q
Thank you for the opportunity. Sir firstly congratulations on a great set of numbers.
Management
Q
So sir, my question is slightly broad based you mentioned about your emphasis on product, loan mix change where you will focus more on retail segments. Sir, firstly I just want to understand if you have, I mean a product mix target over let's say a medium term let's say 38% of our loan book is currently corporate, right? So I mean do you have any target where you or sweet spot that you'd like to achieve over a two to three year period?
P.R. Seshadri
We would like to bring our corporate book down to about a third of our total balance sheet. Within that also we have certain lower-yielding assets which are basically, you know, LC bills, etcetera where we would like to bring that down. So we do have an internal target that we are working to, but I don’t have it right here. But I'll what I'll try and answer is in broad terms, which is basically we want to bring corporate down and within corporate there are some segments which are specifically even lower yield, which is this very short duration moneys that we give to very highly-rated corporate
Q
Yeah, hi, sir. Sir, quickly on this ECLGS scheme, so would it be fair to assume that your entire MSME portfolio will qualify because all are MSME and even the non-MSME I believe it is like MSME but those who are not registered with Udyam, will that be fair assessment? Because I think the ticket size is capped at INR100 crores so all MSME should ideally qualify, will that be correct?
P.R. Seshadri
That is true. Okay. And sir if you can recall let's say the ECLGS portfolio, I mean this a great scheme and the results of, you know, COVID scheme I think is very, very clear. But if you can recall your experience if you had to devolve any guarantee and how easy or difficult it is to redeem that guarantee from government? That is number one in terms of procedure and in terms of did you claim any guarantee and did you finally get those guarantee? That is question number one. And the slippages in ECLGS book earlier that was I mean let's say similar to bank level slippages, right, in let's say FY
Q
Thank you very much, ma'am. At the outset, allow me to thank all the folks who dialled into this call. We are very, very grateful for their time. We want to reiterate that we've had a very good year this year and a good quarter. And, you know, it's been a period of consolidation. I think our balance sheet is in is in good shape. Our asset quality has improved very, very dramatically and we are well-positioned to meet the challenges that the environment throws at us. And we think that from a growth perspective we are well-positioned to actually achieve the growth numbers that we've set for ours
Management
Speaking time
P.R. Seshadri
35
Moderator
17
Vinod Francis
15
Niraj Jalan
9
Darshan Deora
6
Parth Gutka
6
Jai Prakash Mundra
5
Sandeep Joshi
5
Varun
4
Jai Prakash Mundhra
4
Opening remarks
Amandeep Singh S.
Thanks, Yashashree. Good afternoon, everyone, and thanks for joining the call. On behalf of ICICI Securities, we welcome you all to Q4 FY26 post-earnings conference call of South Indian Bank. From management side, we have with us Mr. P.R. Seshadri, Managing Director and CEO, Mr. Dolphy Jose, Executive Director, Mr. Anto George, Chief Operating Officer and Executive Vice President, Mr. Vinod Francis, SGM and Chief Financial Officer, Mr. Jimmy Mathew, SGM and Company Secretary, along with other senior executives of the bank. I'll now hand over the conference to management for their opening remarks post which we can start the Q&A session. Thank you, and over to you, sir.
P.R. Seshadri
Thank you very much. Good evening to all of you and thank you very much for joining us for the South Indian Bank Limited quarter 4 FY26 earnings conference call. I'm P.R. Seshadri, the Managing Director and CEO. I'm joined here by my colleagues that were introduced earlier and two others, Mr. Senthil Kumar, who is our Head of Credit, and Mr. Sony, who is our Chief Information -- CIO. At the outset, let me once again thank you all for being here with us today. We greatly appreciate it. Let me start with the key highlights of financial performance for the financial year 2025 to 2026. The bank declared its highest ever net profit for the year at INR1,455 crores for the financial year 2025-2026, which implies a growth of 12% compared to INR1,303 crores in the prior year. Total deposits grew by 15% to INR1,23,346 crores from INR1,07,526 crores. Retail deposits, excluding bulk deposits, grew by 15% to INR1,20,116 crores from INR1,04,750 crores. Gross advances grew by 14.5% to INR1,00,274 cro
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