South Indian Bank Reports ₹3.51 Billion Profit in Q2 FY26, Asset Quality Improves

Image Source: NDTV Profit

South Indian Bank posted a net profit of ₹3.51 billion for the September 2025 quarter, supported by ₹24.07 billion in interest income and improved asset quality. Gross NPAs declined to 2.93%, while provisions stood at ₹632.7 million. The bank continues to strengthen its balance sheet and expand its retail lending footprint.

South Indian Bank has delivered a robust financial performance for the second quarter of FY26, reporting a net profit of ₹3.51 billion, up 18% year-on-year. The results reflect strong interest income, disciplined provisioning, and continued improvement in asset quality, reinforcing the bank’s strategic focus on retail and MSME lending.

Major Takeaways:

Net Profit Growth: The bank’s net profit rose to ₹3.51 billion in Q2 FY26, compared to ₹2.97 billion in the same quarter last year, driven by higher net interest income and controlled operating expenses.

Interest Income: South Indian Bank earned ₹24.07 billion in interest income, up from ₹21.29 billion in Q2 FY25, reflecting healthy credit growth and improved yield on advances.

Asset Quality Metrics: The Gross Non-Performing Assets (GNPA) ratio declined to 2.93%, indicating better recovery and lower slippages. This marks a significant improvement from the previous quarter’s GNPA of 3.15%.

Provisions and Contingencies: The bank made ₹632.7 million in provisions, down from ₹1.02 billion in Q2 FY25, suggesting improved asset resolution and lower stress in the loan book.

Operational Efficiency: The cost-to-income ratio remained stable, supported by digital transformation initiatives and branch-level productivity enhancements.

Business Growth: Advances grew by 13.1% YoY to ₹84,741 crore, while deposits increased by 8.6% YoY to ₹1,05,455 crore, with CASA ratio holding steady.

Management Commentary: Bank executives highlighted the role of technology-led lending, risk-based pricing, and regional expansion in driving performance. The bank is also exploring co-lending partnerships to scale its MSME portfolio.

Notable Updates:

South Indian Bank shares rose 5.4% post-results, trading at ₹25.25 on the BSE.
The bank is expected to raise Tier II capital in the coming quarters to support credit expansion and regulatory buffers.

With strong earnings, improving asset quality, and a focused retail strategy, South Indian Bank is well-positioned to sustain its growth trajectory in FY26.

Sources: 1. Business Today 2. CNBC TV18 3. Moneycontrol

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