Tag: csb bank

CSB Bank’s gold loan portfolio slowed down, overall business picked up in Q4

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CSB’s gold loan portfolio has increased 61.05% y-o-y during the last quarter to touch Rs 6,121.34 crore.

CSB Bank’s gold loan portfolio has slowed down in the fourth quarter while overall business has picked up, the bank said in a regulatory filing.

The Thrissur-based lender has reported that its deposits have increased by 21.2% year-on-year (y-o-y) during the fourth quarter, while advances saw an increase of 26.7% for the same period. CSB Bank had earlier reported that it expects its advances to grow by 20-22% this fiscal despite a slowdown in the gold loan growth.

The lender has reported that its deposits stand at Rs 19,140 crore as on March 31, 2021, while CASA stands at Rs 6,161.80 crore and term deposits at Rs 12,978.24 crore.

CSB’s gold loan portfolio has increased 61.05% y-o-y during the last quarter to touch Rs 6,121.34 crore. Sequentially, the gold loan portfolio has only increased by 8.65 % from Rs 5,633.75 crore reported in the third quarter of the current fiscal.

The bank reported a 89% y-o-y increase in its third quarter net profits to Rs 53.05 crore on higher interest and treasury income. The 101-year-old bank opened 101 branches in FY21.

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CSB Bank’s deposits grow 21%, advances up 27% in FY21

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Thrissur (Kerala), headquartered CSB Bank recorded a 21 per cent year-on-year (YoY) increase in total deposits and a 27 per cent YoY rise in gross advances, as per its business updates for the year ended March 31, 2021.

As of March-end 2021, total deposits and gross advances stood at ₹19,140 crore (₹15,791 crore as at March-end 2020) and ₹14,645 crore (₹11,559 crore), respectively, the bank said in a disclosure to the exchanges.

Within total deposits, low-cost current account and savings deposits (CASA) were up 34 per cent YoY to ₹6,162 crore, and term deposits increased by 16 per cent YoY to ₹12,978 crore.

Advances against gold & gold jewellery soared 61.51 per cent YoY to ₹6,121 crore within gross advances.

The private sector bank said data in the business updates is provisional and is subject to audit by the Statutory Auditors.

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Will launch country-wide agitations: All India Bank Officers’ Confederation

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The All India Bank Officers’ Confederation (AIBOC) said it will launch a series of country-wide agitations culminating in strikes if the management of the Thrissur (Kerala) headquartered CSB Bank does not implement the terms of the industry-wide 11th Bipartite wage settlement vide the Joint Note for employees on the Indian Banks’ Association (IBA) scale.

“It is pertinent to note here that this 100-year-old bank had implemented all the bipartite settlements thus far beginning with the first in 1966 and the 10th in 2015 along with all Joint Notes.

“…We would like to point out that implementing the Joint Note/Bipartite settlement in this centenary year of the bank will stand to benefit the bank as it will motivate the employees immensely which in the long run will increase the productivity,” said Soumya Datta, General Secretary, AIBOC.

Datta emphasised that AIBOC will stand with all its might behind its associate, the Catholic Syrian Bank Officers’ Association, to ensure that employees on IBA scale in CSB get the fruits of the negotiated 8th joint note.

Compensation structure

In its annual report for 2019-20, CSB Bank said it is the discretion of the bank either to continue with the existing compensation structure prevailing under IBA scheme or modify the structure partially or fully based on the need or discontinue the existing structure in to and switch over to different structure which is prevailing in banking industry by keeping in view, various parameters like industry level, peer group status, burden on the bank, etc.

The report underscored that it is the prerogative of the bank either to utilise the service of IBA in the matter of structuring compensation or devise the compensation structure on its own based on the prevailing practice in the banking industry.

Out of 3,204 employees (as at March-end 2020), 1,805 employees both officers and Award Staff are governed under IBA pay structure and the remaining (1238 employees) are governed under Cost to Company basis.

During this financial year, as a policy decision the bank implemented, reducing the age of retirement of the officers from 60 years to 58 years, the report said.

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CSB Bank to focus on growing balance sheet

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The Thrissur-based lender’s gross advances rose 22.64% YoY to Rs 13,425.24 crore in Q3 while total deposits increased 16.48% to Rs 17,752.97 crore.

CSB Bank said it will focus on growing the balance sheet over the next three years, having managed the pandemic stress well.

Pralay Mondal, president (retail, SME, operations and IT) of CSB Bank, told FE that managing the pandemic has been a pretty good story for the bank which is evident from the decent numbers in the balance sheet.

Proforma gross NPA ratio and net NPA ratio would have been 3.42% and 1.93%, respectively, as on end of December while provision coverage has improved to 91.0%.

The bank reported an 89% year-on-year (YoY) increase in its third quarter net profit to Rs 53.05 crore on higher interest and treasury income.

“CSB had an advantage because we did not have a large balance sheet which could create stress in a moratorium. We also did not have a large unsecured business in the ecosystem. We had repaired most of our balance sheet in SME accounts even before the COVID itself. CSB focused a lot more on gold loans and now it is almost 40% of our total portfolio,” he said.

“Most of the secured business has come back. There has been a more responsible credit behaviour on the part of customers. Generally speaking, while there is some stress in the banking ecosystem, it is much less than what was expected or predicted,” he said.

The Thrissur-based lender’s gross advances rose 22.64% YoY to Rs 13,425.24 crore in Q3 while total deposits increased 16.48% to Rs 17,752.97 crore.

According to Mondal, CSB was a bit cautious during the pandemic. “We can grow a little bit more. I think we can do better in the growth of the balance sheet and that is where we will focus now,” he said, adding that growth will come from SME loans. The plan is to build a strong retail and SME bank.

Mondal feels that new business from retail, home loans and SME would more than compensate any de-growth in the gold loan business. The gold loan portfolio increased 60.36% YoY in Q3 to touch Rs 5,633.75 crore, but sequentially, the growth was merely 14%.

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CSB Bank plans 30% increase in branch numbers

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

CSB Bank said on Thursday it plans to increase its number of branches by 30% year-on-year, having opened 101 new branches in FY21. Currently, the Thrissur-based lender has 474 branches and 309 ATMs across 18 states and two union territories.

Narendra Dixit, retail head, CSB Bank, said, “We are increasing our pan-India distribution, which will complement our significant distribution strength in Kerala and the south and help us in offering seamless services across the country to our valued customers. We have significant distribution in deeper geography and now, we are leveraging that to build a strong agri and financial inclusion model in these markets.”

He said the bank has created digital on-boarding facilities via CSB Wink, which offers digital account opening, e-wallet facilities, online FD services and virtual debit cards, and will aid in higher deposit centres to provide an evenly distributed footprint.

The app, CSB Wink, enables customers to open an account instantly from home. Besides, CSB Bank is working on expanding its product suite, services, and digital banking platform with investments in technology aimed at improving customer experience.

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

“By opening new branches, the bank will look at enhancing its market outreach and catering to lending towards the MSME and agri sectors, while also growing their CASA and gold loan business,” Dixit said.

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CSB Bank aims at branch expansion of 30%, BFSI News, ET BFSI

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Private lender CSB Bank has outlined its plan to strengthen its branch expansion rate to 30% on a yearly basis, after scoping out the expansion of 101 branches during the FY21 fiscal. The movement followers the lender also developing its own application, named “CSB Wink”, that enables customers to open accounts instantly and remotely.

Narendra Dixit, Retail Head of CSB Bank, said “We are increasing our pan India distribution, which will complement our significant distribution strength in Kerala and South and help us in offering seamless services across the country to our valued customers.“

“We have significant distribution in deeper geography and now, we are leveraging that to build a strong agri and financial inclusion model in these markets. Also, in order to enhance our existing retail and franchise offerings, we have created digital on-boarding facilities, via CSB Wink that offers digital account opening, e-wallet facilities, online FD services, virtual debit cards and will aid in higher deposit centers to provide an evenly distributed footprint,“ he further added.

CSB Bank has 474 branches and 309 ATMs spread across 18 states and two UTs. The lender said the expansion of its branches would allow the expansion of offerings including Agriculture, SME, Corporate and NRI Banking services to customers, in an efficient manner.



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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 strengthens senior leadership, aims for 30% growth, BFSI News, ET BFSI

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Canadian billionaire Prem Watsa-backed CSB Bank is targeting a 30% growth on its Rs 13,000-crore loan book. The bank is reworking a retail strategy after industry veteran Pralay Mondal joined the leadership team at the end of last year.

While continuing to bank on gold loans as primary growth driver, the bank is set to target opportunities in the SME, two wheeler and secured loan segments.

Retail head Mondal told ET in an interview that the bank is targeting to grow at 25-30% in the next few years to ramp up its assets and liabilities base.

“Gold loan is a high yielding business; so we will continue to focus on that segment along with strong push on SME loans, especially because of the Covid emergency guarantee loan scheme, two wheeler loans, education loans, loans against property, small business loans and some aspect of agriculture loans,” said Mondal, President – Retail, SME, Operations & IT, CSB Bank. “We also don’t have plans to offer higher rates of interest to attract deposits. I rather focus on getting a strong customer franchise with sticky customers.”

Mondal added that the private lender was targeting a loan mix of 70-30%, where 70% would be retail and SME loans while the remaining would be wholesale assets.

The lender wants to build a strong customer franchise and expand in markets such as Kerala, Tamil Nadu, Karnataka and Andhra Pradesh, Western India, Punjab and Rajasthan. Presently, half of its 454 branches are in Kerala.

“The idea is to build an asset base in the southern and western markets and a liability franchise in the northern markets. We will slowly expand the asset base in north India,” Mondal added.

The Thrissur-based lender saw a 60% rise in its gold loan portfolio which stood at Rs 5644 crore, followed by a 6% growth in SME loans which ended the December quarter at Rs 2131 crore. Corporate loans were flat on a year-on-year basis at Rs 3208 crore. The lender also reported stable asset quality metrics with gross bad loan ratio at 1.77% at the end of December quarter versus 3.22% a year ago.

CSB Bank has also strengthened its leadership team at its risk, technology, retail distribution, SME, NRI and digital business verticals.

Watsa’s Fairfax Holdings holds a majority 50% in the lender.



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IIFL Home Finance, Standard Chartered enter into co-lending partnership, BFSI News, ET BFSI

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MUMBAI: Fairfax and CDC-backed IIFL Finance on Tuesday said its wholly-owned subsidiary IIFL Home Finance Ltd and Standard Chartered Bank have entered into a co-lending arrangement for extending MSME loans.

Under this partnership, IIFL Home Finance Ltd and the Standard Chartered Bank will co-originate these loans and the IIFL Home Finance Ltd will service the customers through the entire loan life-cycle including sourcing, documentation, collection and loan servicing, IIFL Finance said in a regulatory filing.

“We believe this is one of the first co-lending partnerships after the RBI’s revised guidelines,” Monu Ratra, the CEO of IIFL Home Finance, said.

IIFL Home Finance in December partnered with ICICI Bank to provide affordable housing and MSME loans as a sourcing partner. In October CSB Bank had also partnered with IIFL Finance for sourcing and managing retail gold loan assets.

IIFL Finance is a retail-oriented non-banking finance companies (NBFC) with about 90 per cent of its Rs 41,000 crore loan book under the retail category.

In November last year, the Reserve Bank had came out with a Co-Lending Model (CLM) scheme under which banks can provide loans along with NBFCs to priority sector borrowers based on a prior agreement.

The CLM, an improvement over the co-origination of loan scheme announced by the RBI in September 2018, seeks to provide greater flexibility to the lending institutions.



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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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