The South Indian Bank Limited makes a corporate announcement

The FY26 dividend implies a gross cash outflow of Rs 117.79 Crores, based on the proposed dividend of Rs 0.45 per share. It was subject to shareholder approval and was scheduled for payment by 18 September 2026, so it had not yet been paid as of the latest quarterly reporting date, 30 June 2026. ^{[1] [2]}

Capital impact: The annual report states that the proposed dividend was already taken into account in determining capital funds for the CAR calculation as at 31 March 2026. ^[1] Therefore, the later cash settlement should be viewed primarily as payment of an already-recognised distribution rather than a second, incremental reduction in regulatory capital. It will reduce cash when paid, while the capital impact is through the reduction in retained earnings/Common Equity Tier 1 and, consequently, Tier 1 capital.

The exact ratio impact cannot be calculated from the disclosed figures because risk-weighted assets and the absolute Tier-1 capital amount are not provided. Mechanically:

• CAR impact in percentage points = Rs 117.79 Crores / risk-weighted assets × 100
• Tier-1 ratio impact in percentage points = Rs 117.79 Crores / risk-weighted assets × 100

The Q1 FY27 quarterly disclosure reports the bank’s CAR and Tier-1 ratio, but does not state the numerical regulatory minimums alongside them. Accordingly, the exact percentage-point headroom over the CAR and Tier-1 floors cannot be computed from the filing disclosure. The Rs 104.66 Crores shown as “dividends paid” in the FY26 cash-flow statement is a cash payment made during FY26 and should not be substituted for the Rs 117.79 Crores FY26 dividend recommendation. ^[5] TDS may reduce the amount remitted directly to some shareholders, but the bank’s gross dividend obligation remains Rs 117.79 Crores. ^[6]

FY26’s meaningful earnings payout ratio is approximately 8.09%, not 0.00%. That is broadly consistent with the bank’s recent post-recovery pattern: it is almost unchanged from FY25 and close to FY23, although above FY24. The Annual Report confirms that a Rs 0.45 per share, or 45% of face value, dividend was proposed for FY26, subject to shareholder approval ^[1].

Five-year dividend payout trend

Using dividend per share divided by consolidated diluted EPS:

Derived calculation: payout ratio = dividend per share / diluted EPS.

• FY26 is 2.58 percentage points above the FY22-FY25 average of approximately 5.51%, mainly because FY22 had no dividend.
• Compared with the three dividend-paying years FY23-FY25, FY26’s 8.09% payout is broadly in line with the approximately 7.34% average.
• The headline dividend rate has nevertheless increased steadily: nil in FY22, 30% in FY23, 30% in FY24, 40% in FY25 and 45% in FY26 ^{[7] [9] [11] [13] [1]}.

The structured KPI output shows 0.00% for FY26 and Rs 0.00 dividend per share ^{[16] [17]}, which conflicts with the Annual Report’s explicit FY26 dividend proposal. The zero reading therefore appears to reflect an unpopulated dividend field rather than the bank’s actual proposed distribution.

Alignment with the dividend policy

The Annual Report states that the bank’s Dividend Distribution Policy is aligned with Regulation 43A of the SEBI Listing Regulations and the Companies Act, 2013 ^[18]. The FY26 proposal is also described as compliant with the statutory framework governing dividend declaration ^[19].

The conclusion is therefore:

• Procedurally: FY26 is aligned with the stated policy and statutory framework.
• Economically: the approximately 8.09% earnings payout is consistent with the bank’s recent dividend-paying history and still leaves the large majority of earnings retained.
• Quantitatively: the Annual Report disclosure cited here does not specify a fixed payout band, floor, or target formula. Consequently, FY26 can be judged directionally consistent with the policy, but not tested against a specific policy threshold.

South Indian Bank’s FY26 dividend yield cannot be ranked against Federal Bank and DCB Bank on the available market-price data. The reported annual dividends are comparable on a per-share basis, but yield requires each bank’s share price. A market price is available only for DCB Bank.

The key distinction is that the 45%, 60% and 14.5% figures reported for South Indian Bank, Federal Bank and DCB Bank respectively are dividend rates relative to face value, not dividend yields on the market price. ^{[20] [21] [23]}

Accordingly, the defensible conclusion is that DCB Bank’s FY26 dividend yield was approximately 0.71% at its 9 October 2026 closing price, while comparable market-price-based yields for South Indian Bank and Federal Bank require their corresponding share prices. The dividend-per-share comparison alone does not establish which bank offered the higher yield.