South Indian Bank posted a net profit of ₹102 crore in the October-December quarter

Thrissur-headquartered lender reported loss 50.31 crore in the year-ago period, while its profit for the preceding September quarter stood at 223 crores.

Its Chief Executive and Managing Director Murali Ramakrishnan said the bank has decided to make provisions for 312 crore lenders are asking to make aging provisions for pre-2017 security receipts (SRs) for the quarter due on December 4, 2022, RBI circular.

He said that since 2004 the bank has sold non-performing assets 1,955 crore to asset reconstruction companies, of which the balance after redemption stood at Rs. For which a provision of 1,455 crore was to be made.

the bank has to set another 48 crore in the fourth quarter towards such provisions and 15 crore throughout FY24 if the stock of SRs remains the same, he said, expecting provision write-back 100 crore in FY24 to aid profitability.

Bank’s core net interest income grew by 44 percent 825 crore during the quarter under review, while non-interest income was negative. 34.18 crore on account of additional funds set aside as provisions for old security receipts.

Credit growth stood at over 18 per cent, but lagged behind deposit growth at 3 per cent. Ramakrishnan expressed confidence that the bank would be able to acquire enough liabilities to boost credit growth, adding that there is an elasticity in deposits where rate hikes can help make up any shortfall.

Net interest margin (NIM) for the quarter improved to 3.52 per cent, and Ramakrishnan said the bank would be able to close FY2023 with an NIM of 3.20 per cent.

He said its overall capital adequacy was over 16 per cent and the lender has no immediate plans to go for infusion.

South Indian Bank shares closed down 8.54 per cent. 16.60 per share on the BSE against a gain of 0.06 per cent on the benchmark in Tuesday’s trade.