South Indian Bank Shares Poised for Rally with Momentum
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Founded in 1929, South Indian Bank holds the distinction of being the first ‘scheduled bank’ among private banks in Kerala. With a robust presence in South India, particularly in Kerala, the bank offers a wide range of services, including retail and corporate banking, as well as para banking activities such as debit cards and the distribution of third-party financial products. Additionally, it is involved in Treasury and Foreign Exchange business.
South Indian Bank Shares Target and SL
Buy South Indian Bank. 28-30. Target 40, 50 and 60. 1 year. Good to hold for long term.
Key Ratios – 9MFY24
Capital Adequacy Ratio – 16.04%
Net Interest Margin – 3.28%
Gross NPA – 4.74%
Net NPA – 1.61%
CASA Ratio – 31.9%
Branch Network
Presently, the bank operates 948 branches & 1,315 ATMs across India. Majority of its branches are located in semi-urban areas (460) across the country.
Customer Base
At present, it has a customer base of 75 lakhs people.
Loan Book
Corporate Loan accounts for 38% of total loan book, followed by Personal loan segment(23%), business loan(20%) and Agriculture(19%).
Under Personal Segment, Housing Loan accounts for 29% followed by Gold loan (19%), Personal Loan (12%), Mortgage (11%), Vehicle (9%), Loan Against Deposit (8%), Credit Card (8%) & Others (4%).
96% A & Above rate Large Corporate Loans.
Break of Deposits 9MFY24
Retail Term : 64%
Savings : 26%
Current : ~6%
Bulk : 4%
In Q3FY24, Yield on Funds was 7.53% vs Cost of Funds was 4.71% and Yield on Advances was 9.28% vs Cost of Deposits was 5.18%.
Loan Book Concentration
Majority of the bank’s business lies in the state of Kerala. 36% of advances are sanctioned within the state as on Dec 24, 34% of advance are sanctioned in South excluding kerala and remaining 30% of advance are sanctioned to Rest of India,.
Customer Touchpoint by Region 9MFY24
Kerala: 53%
South Ex Kerala: 30%
Rest of India: 17%
Digital Adoption
Digital transactions have gone up to 97.5% in Dec,23 vs 95% in Dec,22.
Rights Issue
In Mar 24,Bank issued and alloted 52,31,85,254 equity shares @ Rs.22 in ratio of 1:4.
Co-branded Card
From Mar 24,Bank will not on-board any fresh customers in their co-branded credit cards until the Bank fully complies with the regulatory guidelines of RBI.
Updates
During Q3FY24, bank had identified certain irregularities in the nature of fraud at one of the branches and the loss is determined at ~Rs. 2,863 Lakhs . Bank had provided the entire amount of~ Rs. 2,863 Lakhs during Q3FY24.
