CSB Bank net profit jumps 180% yoy to Rs148.25cr; Stock soars 3%

24 Jan 2022 , 09:45 AM

CSB Bank Limited on Friday recorded Profit After Tax (PAT) of Rs148.25cr in Q3FY22 as against Rs53.05cr in Q3FY21 and Rs118.57cr for the previous quarter. Net profit increased by 180% yoy and 25% on qoq basis. For the nine months ended December 31,.2021, the net profit improved to Rs327.83cr from Rs175.51cr as on December 31,2020 or by 87%.

Bank continued its accelerated provisioning policy during this quarter as well. The road for the quarter ended December 31, 2021, is 2.43%. The operating Profit of the bank is Rs471.67cr for the 9 months ended December 31, 2021, with an increase of 8% from Rs435.14crs as of December 31, 2020. Q3FY22 operating profit is at Rs147.55cr as against Rs197.19cr for Q3FY21 and Rs149.38cr for Q2FY22, mainly due to a decrease in treasury profit and PSLC commission payout.

Net Interest Income for (NII) for the nine months ended December 31, 2021, stood at Rs849.47cr posting an increase of 28% over the corresponding period last year. In Q3FY22, the NII stood at Rs303.34cr as against Rs251.19cr in Q3FY21 and Rs278.38cr for the previous quarter. ie, up by 21% & 9% respectively. Increase in NII has been powered by spread and volume effects combined with impressive interest income recoveries on Gold loan NPAs.

Non-Interest Income posted a de growth of 23.47% for the nine months period ending December 31, 2021 compared to the corresponding period previous FY mainly due to dip in treasury profits by 89%. Excluding Treasury Profits, non interest income has surged by 41% 9M to 9M.

Cost income ratio for the nine months ended December 31, 2021 is at 54.33% as against 51.92% as on December 31, 2020 (9M). Cost income ratio for Q3FY22 is at 58.49%, which was at 48.47% for Q3FY21 & 55.83% in Q2FY22. Increase in Cost Income Ratio has been contributed by increase in staff cost, increase in rent, depreciation and other expenses and decrease in treasury profits.

The company stock was bullish in early morning trade post Q3 earnings. At around 9.50 am, CSB Bank Ltd was trading at Rs249.00 per share up Rs7.90 or 3.28% from its previous closing of Rs241.10 on the BSE. The scrip opened at Rs247.05 and has touched a high and low of Rs252 and Rs245.35 respectively.

“This was a prominent quarter in terms of NPA recovery where we could contain both gold as well as non-gold NPAs. Out of the gross NPA of Rs388.95cr, Rs102cr is gold NPA with higher recoverability Gross NPA and Net NPA ratios have improved to 2.62% and 1.36% as on December 31, 2021 from 4.11% and 2.63% respectively as on September 30, 2021. Gross NPA and Net NPA ratios excluding gold works out to 1.87% and 0.85% as on December 31, 2021. PCR is now back to >80% territory,” company said.

Capital Adequacy Ratio is at 20.74%, which is well above the regulatory requirement. Leverage ratio is at 7.92% as on December 31, 2021. Liquidity Coverage Ratio is comfortable at 146.41%. Total Deposits grew by 7.34 % yoy and CASA ratio stood at 34.57 % as on December 31, 2021 as against 30.38% as on December 31, 2020 and 32.58% as on September 30, 2021. Advances (Net) grew by 11.42% yoy to Rs14637cr as on December 31, 2021.

C VR Rajendran, Managing Director & CEO 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 yoy growth of 11.42% in net advances and 22.14% in CASA. Gold loans also have started to move up posting a QoQ growth of about 7%.

Coming to profitability, Q3 continued to be a robust quarter registering a growth of 179% on a YoY 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.”