South Indian Bank [NSE: SOUTHBANK] has begun the financial year on a strong note, reporting an encouraging performance for the first quarter of FY26. Despite a marginal decline in net interest income (NII), the bank posted a healthy year-on-year rise in profitability, underpinned by improved asset quality and continued operational momentum.
On 17 July 2025, the private sector lender released its Q1 earnings, highlighting growth across core segments and a consistent focus on strengthening its financial position.
Q1 FY26 Financial Highlights
The bank recorded a 10% annual rise in net profit for the first quarter of FY26, despite a drop in net interest income during the same period. Net profit stood at ₹321.95 crore, up from ₹293.9 crore in Q1 FY25.
Although net interest income declined, the bank’s overall operating income rose by 8.01% year-on-year to ₹2,984.33 crore, compared to ₹2,763.13 crore during the same period a year earlier.
Segment-wise Revenue Overview
- Retail Banking continued to be the largest revenue contributor, delivering ₹1,300.09 crore in Q1 FY26, a 3.91% increase YoY.
- This included ₹221.58 crore from digital banking and ₹1,078.51 crore from other retail banking operations.
- The treasury segment posted significant growth, with revenue increasing by 50.28% YoY to ₹731.14 crore, up from ₹486.51 crore in the previous year.
- Corporate or wholesale banking saw a slight contraction, generating ₹856.90 crore, compared to ₹858.92 crore in Q1 FY25 — a marginal 0.24% decrease YoY.
Asset Quality and Capital Position
The bank demonstrated consistent progress in asset quality over the first quarter of FY26:
- The Gross NPA ratio improved to 3.15% in Q1 FY26, compared to 3.20% in the prior quarter and 4.50% in the same period last year.
- Net NPA (NNPA) reduced further to 0.68%, down from 0.92% in Q4 FY25 and 1.44% in Q1 FY25.
On the capital adequacy front, the bank strengthened its position, reporting a ratio of 19.48%, up from 18.11% in the corresponding quarter of the previous financial year.
Stock Performance Snapshot
As of 3:30 PM on 17 July 2025, South Indian Bank shares traded at ₹30.71 on the National Stock Exchange (NSE), down 0.45% on the day. The stock had recently touched its 52-week high of ₹32.25 on 2 July 2025 and recorded a 52-week low of ₹22.27 on 2 November 2024.
The bank’s market capitalisation stood at ₹7,951.06 crore, reflecting its stable market positioning.
Conclusion
South Indian Bank’s Q1 FY26 results reflect continued efforts toward financial discipline, growth in retail and treasury segments, and strong asset quality management. Despite a temporary contraction in net interest income, the bank delivered robust profit growth and strengthened its balance sheet. The results underscore the bank’s ability to adapt and deliver in a dynamic operating environment, laying the foundation for a stable performance through the rest of the financial year.
