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South Indian Bank
South Indian Bank (SIB) reported healthy net profit growth of 24.4% yoy
(15.1% qoq) to `95cr, above our (`83cr) and street’s estimates (`88cr). NIM
expansion along with lower slippages was the key highlight of the results.
During 2QFY2012, the bank’s business growth moderated in-line with overall
industry trends; however, it remained comfortably ahead of the industry.
Advances grew by 3.9% qoq vis-à-vis marginal 0.2% growth for the industry
(up to September 23, 2011). Deposits showed traction, rising by 4.5% qoq as
compared to 0.8% growth for the industry. The bank’s CASA deposits grew by
relatively lower 3.5% qoq, leading to a marginal 20bp qoq compression in
CASA ratio to 21.3% (down from 23.9% in 2QFY2011). With the pass-through
of higher interest rates and a larger share of higher-yielding gold loans, the
bank was able to improve its yield on advances further by 36bp qoq and
150bp yoy to 12.1% (for 1HFY2012). With wholesale funding costs remaining
benign, the bank’s cost of deposits went up only marginally (6bp qoq), leading
to a healthy ~50bp qoq expansion in calculated NIM (for 2QFY2012). Asset
quality of the bank improved during 2QFY2012, with absolute gross and net
NPAs declining by 2.5% qoq and 8.2% qoq, respectively, and provision
coverage ratio excluding technical write-offs improving to 74.7%. Slippages
surprised positively, coming in at just 0.5% (annualized) vis-à-vis 0.8% in
2QFY2012 in spite of deterioration in the economic growth outlook over the
past few quarters. The bank’s capital adequacy remained healthy at 13.5%.
The stock is trading at 1.2x FY2013E ABV. The stock rating is currently under
review.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
South Indian Bank
South Indian Bank (SIB) reported healthy net profit growth of 24.4% yoy
(15.1% qoq) to `95cr, above our (`83cr) and street’s estimates (`88cr). NIM
expansion along with lower slippages was the key highlight of the results.
During 2QFY2012, the bank’s business growth moderated in-line with overall
industry trends; however, it remained comfortably ahead of the industry.
Advances grew by 3.9% qoq vis-à-vis marginal 0.2% growth for the industry
(up to September 23, 2011). Deposits showed traction, rising by 4.5% qoq as
compared to 0.8% growth for the industry. The bank’s CASA deposits grew by
relatively lower 3.5% qoq, leading to a marginal 20bp qoq compression in
CASA ratio to 21.3% (down from 23.9% in 2QFY2011). With the pass-through
of higher interest rates and a larger share of higher-yielding gold loans, the
bank was able to improve its yield on advances further by 36bp qoq and
150bp yoy to 12.1% (for 1HFY2012). With wholesale funding costs remaining
benign, the bank’s cost of deposits went up only marginally (6bp qoq), leading
to a healthy ~50bp qoq expansion in calculated NIM (for 2QFY2012). Asset
quality of the bank improved during 2QFY2012, with absolute gross and net
NPAs declining by 2.5% qoq and 8.2% qoq, respectively, and provision
coverage ratio excluding technical write-offs improving to 74.7%. Slippages
surprised positively, coming in at just 0.5% (annualized) vis-à-vis 0.8% in
2QFY2012 in spite of deterioration in the economic growth outlook over the
past few quarters. The bank’s capital adequacy remained healthy at 13.5%.
The stock is trading at 1.2x FY2013E ABV. The stock rating is currently under
review.
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