South Indian Bank was another of the smaller private sector lenders to disappoint with its Q1FY16 results, after DCB. Total income and net interest income were flat YoY at Rs. 1,481 crore and Rs. 341 crore, respectively. Although CASA ratio improved to 22.28% as on 30-6-15, from 22.07% a year ago and 20.59% 3 months ago, interest expense actually rose, quite contrary to other banks, which have seen declining interest cost with borrowings getting cheaper. Thus, net interest margin also declined in Q1FY16 to 2.54% from 2.72% YoY and 2.70% QoQ.

Moreover, despite lower provisions of Rs. 80 crore (as against Rs. 95 crore YoY), net profit halved to Rs. 65 crore in Q1FY16, from Rs. 127 crore in Q1FY15, resulting in EPS of 0.48 for the first quarter of FY16. Asset quality, which was hitherto maintained, only deteriorated further, with net NPAs ballooning to 1.21% of net assets, vis-à-vis 0.96% as of 31-3-15 and 0.91%, as of 30-6-14.

Thus, Q1 was very poor for South Indian Bank, having 828 branches and 1,244 ATMs, on all fronts - with asset quality, profitability and return ratios suffering badly. Book value per share stands at Rs. 27, as of 30-6-15, which implies share is ruling at 6% discount to its current book value. However, despite low valuations, there seems no respite for poor performance.