South Indian Bank delivered its strongest quarterly performance to date, reporting a record net profit of ₹374.32 crores for Q3FY26, representing a 9% increase from ₹341.87 crores in the corresponding quarter of the previous fiscal year. The Kerala-based private sector bank's nine-month net profit also grew 9% to ₹1,047.64 crores compared to ₹960.69 crores in the same period last year.

Strong Operational Performance

The bank's operational metrics demonstrated robust growth across key parameters. Pre-provisioning operating profit increased 10% year-on-year to ₹584.33 crores from ₹528.84 crores in Q3FY25. Non-interest income showed particularly strong momentum, rising 19% to ₹485.93 crores from ₹409.22 crores in the previous year.

The bank maintained positive operating leverage for the nine-month period ended December 2025, with net total income increasing 7.44% while operating expenses rose only 3.61% compared to the corresponding period in the previous year.

Significant Asset Quality Improvement

South Indian Bank achieved substantial improvements in asset quality metrics during the quarter. Gross non-performing assets (NPA) declined significantly by 163 basis points to 2.67% from 4.30% on a year-on-year basis. Net NPA showed an even more impressive improvement, dropping 80 basis points to 0.45% from 1.25% in Q3FY25.

The provision coverage ratio excluding write-offs increased substantially by 1,177 basis points to 83.50% from 71.73%, while the provision coverage ratio including write-offs rose 1,050 basis points to 91.57% from 81.07%. The slippage ratio also improved, declining 17 basis points to 0.16% from 0.33% in Q3FY25.

Robust Business Growth

The bank's deposit base showed strong expansion with retail deposits growing 13% to ₹1,15,563 crores from ₹1,02,421 crores year-on-year. NRI deposits increased 9% to ₹33,965 crores from ₹31,132 crores. The current account and savings account (CASA) portfolio grew 15% year-on-year, with savings bank deposits rising 14% and current account deposits increasing 20%.

Gross advances expanded 11% to ₹96,764 crores from ₹86,966 crores, driven by growth across multiple segments. The corporate segment increased 10% to ₹38,353 crores from ₹34,956 crores, with A-rated and above corporate advances rising to ₹24,628 crores from ₹21,068 crores. The gold loan portfolio showed exceptional growth of 26% to ₹20,952 crores from ₹16,966 crores, while vehicle loans grew 24% to ₹2,393 crores from ₹1,938 crores.

Management Commentary and Capital Position

MD & CEO P. R. Seshadri highlighted that the bank's well-defined strategy continues to drive strong business performance. He emphasized the bank's strategic focus on achieving profitability through quality credit growth, successfully onboarding fresh advances with low risk profiles while maintaining prudent risk management practices.

The bank's capital adequacy ratio stood at 17.84% as of December 2025, indicating a strong capital position that supports future business growth. The return on assets continued to remain above 1%, demonstrating efficient asset utilization. South Indian Bank operates 948 branches, 2 ultra small branches, 3 satellite branches, 1,143 ATMs, and 126 cash recycling machines across India, along with a representative office in Dubai, UAE.

South Indian Bank shares will be in focus on Friday, January 16, following the Kerala-based lender's strong quarterly performance for the October-December period. The bank announced its unaudited standalone and consolidated financial results, showcasing robust operational performance and improved asset quality metrics.

Financial Performance Highlights

The bank delivered solid financial results for Q3, with key performance indicators showing positive momentum across multiple parameters.

Asset Quality Improvement

The bank demonstrated significant improvement in asset quality metrics, reflecting enhanced risk management and collection efforts. Asset quality saw marginal improvement compared to the September quarter.

Business Growth Metrics

In its third quarter business update, the bank reported strong growth in core business parameters, reflecting sustained traction across key segments.

The bank noted that adjusted for a technical write-off of ₹900 crore carried out in the March quarter, year-on-year loan growth would have been 12.43%, indicating strong underlying business momentum.

Capital Position and Market Performance

The bank maintained a strong capital adequacy ratio of 17.84% under Basel III norms, compared to 18.00% in the corresponding quarter of the previous year. The paid-up equity share capital stood at ₹262 crore with a face value of ₹1 per share.

Stock Market Response

Shares of South Indian Bank closed 5.11% higher on Wednesday ahead of the results announcement at ₹42.54. The stock has risen over 12% so far in 2026, reflecting positive investor sentiment towards the bank's improving fundamentals and growth prospects.

The financial results were reviewed by the Audit Committee and approved by the Board of Directors, with joint statutory auditors providing unmodified review reports on the quarterly performance.