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CSB Bank Q2 net jumps 72% on income growth

Banking & Finance

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CSB Bank reported a 72 per cent year-on-year (yoy) jump in second quarter net profit at ₹119 crore due to healthy growth in net interest income and other income, and write-back in total provisions.

The Thrissur (Kerala)-headquartered bank had recorded a net profit of ₹69 crore in the year ago quarter.

Net interest income (the difference between interest earned and interest expended) was up 21 per cent yoy at ₹278 crore (₹229 crore in the year ago quarter).

Other income, including fees earned from providing services to customers, commission from non-fund based banking activities, earning from foreign exchange transactions, selling of third-party products, profit on sale of investments (net), etc., rose about 36 per cent yoy to ₹60 crore (₹44 crore).

The bank saw a write-back of ₹9.2 crore in total provisions, including towards non-perfoming assets (NPAs) in the reportng quarter. In the year ago quarter, it made provisions aggregating ₹26.90 crore in the year ago quarter.

As of September-end, total advances grew 12.57 per cent yoy to ₹15,097 crore.

Growth in advances

The growth was mainly on the back of increase in agriculture & microfinance industry loans, gold loans, corporate loans, two-wheeler loans, new MSME loans. However, retail loans, MSME general loans and assignment loans saw a decline.

Total deposits were up 9.09 per cent to ₹19,055 crore. The proportion of low-cost current account, savings account (CASA) deposits in total deposits improved to 32.60 per cent (29.39 per cent as at September-end 2020). During the reporting quarter, fresh slippages were lower at ₹205 crore (of which ₹170 crore is on account of gold loans) against ₹435 crore in the first quarter.

Non-performing asset (NPA) reduction, including via upgradation and recoveries, was higher at ₹305 crore (₹142 crore in the preceding quarter).

CVR Rajendran, Managing Director & CEO, said: “…in terms of profitability, Q2 is a much better quarter than Q1FY22…Lot of good work has gone in managing the portfolio stress both in gold and non- gold portfolios and SMA (special mention accounts)/NPA levels were kept under control.”

He observed that CSB Bank saw return of demand in Micro, Small and Medium Enterprise (MSME), SME and Whole Sale Banking segments during the last part of the quarter. Further, visible growth is also happening in Gold loan portfolio.

As the impact of Covid is not fully ascertained, the bank decided to continue with the accelerated provisioning policy for stressed and NPA accounts, Rajendran said.

BK Divakara, CFO, emphasised that this is the first time that the bank has posted over ₹100 crore profit in a quarter. Net interest margin improved to 5.22 per cent, from 4.48 per cent in the year ago quarter.

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SBI Card Q1 net profit jumps 74% sequentially despite 2nd Covid wave

Banking & Finance

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SBI Card, the country’s largest pure play credit card issuer, on Friday reported a 74 per cent sequential increase in net profit for the first quarter-ended June 30 at ₹305 crore against net profit of ₹175 crore recorded in the previous quarter.

This is a clear pointer that the performance of SBI Cards had not been unduly impacted by the second wave of Covid-19 that struck India since April this year, said corporate observers.

However, on a year-on-year basis, net profit in the first quarter declined 23 per cent when compared to net profit of ₹393 crore in the first quarter last year.

Total income for the quarter under review declined 1 per cent sequentially to ₹2,451 crore from ₹2,468 crore in the previous quarter. However, on a year-on-year basis, total income in Q1FY22 was up 12 per cent against ₹2,196 crore in same quarter last fiscal, a company release said.

Higher retail spends

Retail spends for the quarter under review were up 63 per cent year-on-year at ₹27,000 crore despite lockdown 2.0. In the same quarter last fiscal, retail spends stood at ₹16,608 crore.

Nearly 55 per cent of the retail spends in the first quarter this fiscal were online spends. This was higher than 52 per cent for the first quarter last year.

Corporate spends for the quarter under review stood at ₹6,000 crore, up 149 per cent on a year-on-year basis over ₹2,477 crore.

The cards in force stood at 1.2 crore as of end-June 2021, reflecting 14 per cent increase over same quarter last year. However, the CIF growth sequentially was a modest 2 per cent.

Gross NPA stood at 3.99 per cent in Q1, higher than 1.35 per cent in same quarter last fiscal. It was, however, lower than 4.99 per cent recorded in previous quarter this year.

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