CSB Bank gains after Q3 PAT spurts 180% YoY to Rs 148 cr

24 Jan 2022 , 12:52 PM

In Q3 FY22, the NII stood at Rs 303.34 crore as against Rs 251.19 crore in Q3 FY21 and Rs 278.38 crore for the previous quarter, rising 21% Y-o-Y (year-on-year) and 9% Q-o-Q (quarter-on-quarter) respectively. The increase in NII was powered by the spread and volume effects combined with impressive interest income recoveries on Gold loan NPAs.

The operating profit Q3 FY22 stood at Rs 147.55 crore as against Rs 197.19 crore for Q3 FY21 and Rs 149.38 crore for Q2 FY22, mainly due to decrease in treasury profit and PSLC commission payout.

On the asset quality front, the gross non-performing assets were at Rs 388.95 crore as of 31 December 2021 as against Rs 586.83 crore reported on 30 September 2021 and Rs 686.39 crore as of 30 June 2021. The gross NPA ratio was 2.62% as of 31 December 2021 as compared with 4.11% as on 30 September 2021 and 4.88% as of 30 June 2021. The net NPA ratio was 1.36% as of 31 December 2021 as against 2.63% reported on 30 September 2021 and 3.21% as of 30 June 2021.

Out of the gross NPA of Rs 388.95 crore, Rs 102 crore is gold NPA with higher recoverability. Gross NPA and Net NPA ratios excluding gold works out to 1.87% and 0.85% as on 31 December 2021. Provisioning Coverage Ratio (PCR) stood at 82.95% during the quarter.

Capital Adequacy Ratio was at 20.74%, which is well above the regulatory requirement. Leverage ratio stood at 7.92% as on 31 December 2021. Deposits jumped 7.34% Y-o-Y (year-on-year) while advanced grew 11.42% to Rs 14,637 crore as of 31 December 2021 over 31 December 2020. CASA ratio was at 34.57% as on 31 December 2021 as against 30.38% as on 31 December 2020 and 32.58% as on 30 September 2021.

Speaking about the Q3 performance, C V R Rajendran, the managing director (MD) and chief executive officer (CEO) of CSB Bank, said, Q3 FY 22 was really a BIG quarter in terms of recovery. Though we had some challenges related to portfolio stress at the FY beginning mainly in Gold due to the reversal of LTV regime as mandated by the regulators, our focused and systematic approach yielded the desired results. We could record a Y-o-Y growth of 11.42% in net advances and 22.14% in CASA. Gold loans also have started to move up posting a Q-o-Q growth of about 7%. Coming to profitability, Q3 continued to be a robust quarter registering a growth of 179% on a Y-o-Y quarterly basis and 87% for the 9-month period ended 31.12.21 vis a vis the corresponding period last year.

This could be achieved despite continuing with the accelerated provisioning policy in the current quarter as well. Our capital and liquidity position continues to be resilient. The key indicators like NII, NIM, RoA, GNPA/ NNPA, PCR etc. are strong. While gold portfolio continues to be our major focus area, we are setting the right platforms for buildup of the other retail businesses such as home loans, personal loans, credit cards etc., on our own or through partnerships. which will help us to scale up the retail business. On the SME/ WSB portfolios, the activity level has increased. On the fee part also we are faring well. Though Omicron waves are creating some concerns on the progressive economic outlook that followed the covid second wave recovery, we are focusing on improving both topline and bottom-line parameters in the current quarter as well.

CSB Bank has a strong base in Kerala along with significant presence in Tamil Nadu, Karnataka, and Maharashtra. It offers a wide range of products and services to overall customer base of 1.6 million, with particular focus on SME, retail, and NRI customers.

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