After the bank’s Managing Director and Chief Executive Officer (MD and CEO) resigned from being reappointed for personal or family reasons, shares of South Indian Bank fell 17% to Rs 13.79 on the BSE in intraday trade on Wednesday. circumstances. The price of the stock was at its lowest since November 2022.
In its meeting on March 28, 2023, the Bank’s Board of Directors considered Murali Ramakrishnan, MD and CEO,’s request not to present himself for reappointment due to personal or family circumstances. in an exchange filing for the current period, which is up until September 30, 2023, South Indian Bank stated.
The private bank added that the board-appointed search committee would find and evaluate suitable candidates for the positions of MD and CEO.
at 11:41 am; On the BSE, South Indian Bank was trading at Rs 14.19, down 14%. The S&P BSE Sensex, on the other hand, rose 0.03% to 57,631. Normal exchanging volume over the counter bounced in excess of multiple times today. On the NSE and BSE, a total of 118 million shares have changed hands thus far.
South Indian Bank will continue to operate in accordance with its Vision 2025 plan after the new MD is hired in September 2020. It put an emphasis on asset quality and NIM as well as calibrated growth of the balance sheet. Since then, it has produced 54% of the total loan book, and the operating metrics in the new book (from September 20) are comparable to or superior to those of peers.
Remembering the tradition of high pressure in the corporate and mid-corporate fragments of South Indian Bank, the new administration (subsequent to assuming responsibility in Sept’20) returned to the business system and laid accentuation on ‘better standards without ever compromising’. In addition, the sourcing and underwriting procedures were completely redesigned with a clear emphasis on asset quality and margins. In the third quarter results update, analysts at ICICI Securities stated that SMA-2 was at 0.2% and GNPL was at 0.06% on December 22.
As we now model higher NIM and lower credit cost estimates, the brokerage firm has increased its FY23E/FY24E earnings estimates by 12% and 24%, respectively. The bank will be able to maintain its low deposit rates until the excess liquidity on the balance sheet is eliminated thanks to the low C/D ratio, which stands at 74%.
Credit costs are higher than expected, and the NIM will shrink if the cost of deposits rises faster than asset revaluation.