South Indian Bank Share Price Dips as Q2 Interest Income Falls 8.3% YoY

Shares of South Indian Bank witnessed a decline on October 16, following the release of its second-quarter results for the financial year. The fall came after the bank reported a drop in its interest income, despite a rise in net profit supported by higher other income.

Interest Income Declines in Q2FY26

South Indian Bank’s Net Interest Income (NII), which represents the core income earned from its lending operations, decreased by 8.3% year-on-year to ₹809 crore, compared to ₹882 crore in the same period last year. The decline in NII reflected pressure on margins amid changing market conditions.

However, the bank’s net profit increased by 8.2% year-on-year to ₹351 crore, largely aided by a 26% rise in other income, which reached ₹516 crore during the July–September quarter. The performance highlighted the role of non-interest income in supporting profitability despite lower core earnings.

Improvement in Asset Quality and Provisions

The bank reported a marginal improvement in its asset quality during the quarter. Gross Non-Performing Assets (NPA) came down to 2.93% from 3.15% in the June quarter, while Net NPA improved to 0.56% from 0.68%.

In absolute terms, gross NPA reduced to ₹2,703 crore from ₹2,806 crore, and net NPA fell to ₹506 crore from ₹591 crore. Provisions for the quarter also declined significantly to ₹63 crore, compared to ₹239 crore in the previous quarter, reflecting better credit management and recoveries.

Steady Growth in Advances and Deposits

South Indian Bank had earlier disclosed strong operating performance for the September quarter. Gross advances increased by 9% year-on-year to ₹92,887 crore, while total deposits rose by 10% to ₹1.15 lakh crore.

The bank’s CASA (Current Account and Savings Account) deposits also registered a 10% increase year-on-year to ₹36,841 crore, maintaining a CASA ratio of 31.86%, marginally up from 31.8% last year.

Market Reaction and Share Price Movement

Following the earnings announcement, South Indian Bank share price fell by 3.1% to ₹31.78. Despite the dip, the stock has recorded a 26% gain so far in 2025, reflecting improved investor sentiment earlier in the year.

As of 2:14 p.m. on 16 October, South Indian Bank share price stood at ₹32.4, marking a 1.31% decline for the day. The bank’s market capitalisation was ₹8,470 crore, with the stock trading between a high of ₹34.4 and a low of ₹22.1 over the past year. 

The scrip reflected a P/E ratio of 6.40 and a book value of ₹39.8, while offering a dividend yield of 1.23%. With a Return on Capital Employed (ROCE) of 6.50% and a Return on Equity (ROE) of 13.8%, the bank continues to demonstrate operational resilience, even as it navigates through moderating interest income growth in the second quarter.

Read More:Huhtamaki India Share Price Jump 15% After Strong Q3 FY26 Earnings Results

Conclusion

South Indian Bank’s second-quarter results reflect a mixed performance, with improved asset quality and higher other income balancing the decline in interest earnings. While the South Indian Bank share price saw a short-term dip post-results, the bank’s steady growth in advances and deposits underscores its stable operational footing.

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