CSB Bank reports highest-ever net profit of Rs 218.40 crore for FY21

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Total income of the bank during the period rose to Rs 609.45 crore from Rs 475.49 crore in the -ago period.

CSB Bank on Saturday reported a net profit of Rs 42.9 crore in the fourth quarter of FY21 largely on higher interest income. The Thrissur-based lender had reported a net loss of Rs 59.7 crore in Q4 FY20 and a net profit of Rs 53 crore in the third quarter of the last fiscal year.

CSB reported the highest-ever net profit of Rs 218.40 crore for the full financial year 2020-21 as against a net profit of Rs 12.72 crore in FY 2019-20. Net interest income of the lender is seen higher by 75 % year-on-year (y-o-y) to Rs 275.7 crore for the fourth quarter of FY21, while non-interest income grew by 30 % y-o-y to touch Rs 112.3 crore. Total income of the bank during the period rose to Rs 609.45 crore from Rs 475.49 crore in the -ago period.

C VR Rajendran, managing director & CEO of the bank, said the bank can now fully focus on growth in FY 22 without any baggages of the past.

“While the industry grew by approximately 12% in deposits and 6% in advances, we could outperform by recording 21% and 27% growth in deposits and advances respectively. In terms of overall business, the bank has grown a fourth of the total business it grew in past 99 years. We could also open 101 branches in this 101st year of existence,” he added.

The bank has plans to open 200 branches in the current fiscal.

Gross non-performing assets (NPA) as a percentage of gross advances is seen at 2.68 % from 1.77 % in the preceding quarter and 3.54% in the year ago period. Net NPA as a percentage of gross advances stands at 1.17% for the fourth quarter as against 0.68% in the third quarter and 1.91% in the fourth quarter of FY20.

However, the bank’s proforma Gross NPA ratio and proforma Net NPA ratio is seen at 3.42 % and 1.93 % respectively for the third quarter, bank sources said.

Gold loan portfolio of the lender has grown by 61.3% y-o-y to touch Rs 6131 crore and the bank has 17.28 tonnes of gold in its custody.
Provision Coverage of the bank has improved to 84.89 % as on 31.03.2021 from 80.02 % as on 31.03.2020.

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CSB Bank eyeing 20-22% growth in current fiscal

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“We are seeing good enquires from the SME and mid-size corporates. Retail demand is also back.Demand is good in the agro-processing and auto ancillary sector,” he added.

CSB Bank expects to grow by 20-22% in the current financial year despite a slowdown in growth in the gold loan business.

In the next fiscal, the bank expects to grow by 25% both in advances and liabilities, with its new team of officials becoming functional by April 2021 ,MD and CEO CVR Rajendran said.

“We are seeing good enquires from the SME and mid-size corporates. Retail demand is also back.Demand is good in the agro-processing and auto ancillary sector,” he added.

Total advances grew 21.6% year-on-year (y-o-y) to Rs 13,137.3 crore during the third quarter, with the gold loan portfolio growing by almost 60.7 % y-o-y to `5,644 crore. Sequentially, the gold loan portfolio grew only 14 % .

“Gold loan has tapered down during Q3 .Gold prices have become volatile and have also fallen. We have gradually reduced the LTV from 82 %. Our average LTV for the current portfolio would be 70-75%,” he added.

The Thrissur-based lender reported a 89 % y-o-y increase in its third quarter net profit to Rs 53.05 crore on higher interest and treasury income.

Regarding the NIM, Rajendran said that NIM of 5.17 % cannot be maintained for long as there is pricing challenges in most sectors. He added that the ideal NIM for the bank would be above 4 % in the long-run. “COVID has not had the impact which we had anticipated. We have build up a huge reserve for it. Provision Coverage Ratio is 91% and apart from it there is standard provisioning don’t think so much will be required and we will slowly unwind going forward,” he said.

“Accounts which would have been classified as NPA but for Supreme Court embargo,excluding restructured, totalled Rs 195 crore. We are maintaining 25% provision on these accounts. Out of Rs 195 crore, Rs 130 crore or 70% are gold loan accounts which we expect to recover without any hitches or glitches,’ he added.

On the VRS scheme the bank introduced last quarter, he said that only 33 employees of the 223 who are eligible have opted for it.

He added that the bank has opened 60 branches in the current fiscal from the planned 100 branches .

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CSB Bank reports 89% y-o-y rise in Q3 net profit

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However, had the bank classified borrower accounts as NPA after August 31, 2020, its proforma Gross NPA ratio and proforma Net NPA ratio would have been 3.42% and 1.93%, respectively, the bank sources said.

CSB Bank on Tuesday reported an 89% year-on-year (y-o-y) increase in its third quarter net profits to Rs 53.05 crore on higher interest and treasury income.

The Thrissur-based lender had reported a net profit of Rs 28.1 crore in Q3 FY20 and Rs 68.9 crore in the second quarter of the current fiscal year. Non-interest income of the lender is seen higher by 130% year on year at Rs 116 crore for the third quarter of FY21 against Rs 50.6 crore in the year-ago period. Total income during the period rose to Rs 599.24 crore from Rs 439.29 crore.

Total deposits grew 16% YoY and CASA ratio stood at 30.4% as on December 31, 2020, against 28.6% as on December 31, 2019. Advances (net) grew at 22% YoY, mainly contributed by gold loan growth of 61%. Managing director & CEO C VR Rajendran said recent revival of the economic activity was having a positive impact on the banking industry as a whole.

“In the context of the withdrawal of the moratorium benefits by the regulator, we decided to be prudent by holding provisions in excess of the regulatory provisions on the stressed assets. Apart from the core NII growth, improved trading income /provision reversals at treasury backed by the favourable yield movements, net income by way of PSLC sale etc supported us on the income side,” the CBS Bank CEO added.

Asset quality improved with gross non-performing assets (NPAs) as a percentage of gross advances at 1.77 % from 3.04 % in the preceding quarter. While net NPA declined to 0.68 % in the December quarter from 1.30 % in the September quarter and 1.98 % in the year-ago quarter.

However, had the bank classified borrower accounts as NPA after August 31, 2020, its proforma Gross NPA ratio and proforma Net NPA ratio would have been 3.42% and 1.93%, respectively, the bank sources said.

Its Provision Coverage has improved to 91.0% as on December 31, 2020, from 84.2% as on September 30 and 80.0% as on March 31, 2020. CSB said that it was holding additionally provision of Rs 154 crore for the stressed assets.

The board has also approved the roll-out of a voluntary retirement scheme (VRS) for its staff members. Rajendran said 223 staff members were eligible for the VRS and the total outgo would be Rs 80 crore if all of them opt for the VRS.

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