CSB Bank reported a 72 per cent YoY (YoY) jump in second quarter net profit at Rs 119 crore due to healthy growth in net interest income and other income, and write-downs in gross provisions.

The Thrissur (Kerala State) based bank recorded a net profit of Rs 69 crore in the last quarter.

Net interest income (difference between interest earned and interest expensed) increased by 21% YoY at ₹278 crore (Rs229 crore in the last year’s quarter).

Other income, including fees earned from providing services to clients, commissions from non-fund banking activities, profits from foreign exchange transactions, sale of third-party products, profits from the sale of (net) investments, etc., increased by about 36 per cent. Annually to Rs 60 crore (Rs 44 crore).

The bank saw a recovery of Rs 9.2 crore in total provisions, including non-performing assets (NPAs) in the reporting quarter. In last year’s quarter, it made a consolidated provision of Rs.26.90 crore in last year’s quarter.

As of the end of September, total advances grew by 12.57 per cent YoY to Rs.15,097 crore.

growth in progress

The growth was mainly due to the increase in agriculture and microfinance loans, gold loans, corporate loans, two-wheeled loans and new loans to small and medium enterprises. However, retail loans, general loans to MSMEs, and specialization loans saw a decline.

Total deposits increased by 9.09% to Rs 19,055 crore. The ratio of low-cost current and savings account deposits to total deposits improved to 32.60 percent (29.39 percent at the end of September 2020). During the reporting quarter, new slips were lower at Rs.205 crore (of which Rs.170 crore is on gold loans) versus Rs.435 crore in the first quarter.

The reduction of non-performing assets (NPA), including by way of upgrade and redemption, was higher at Rs.305 crore (Rs.142 crore in the previous quarter).

CVR Rajendran, Managing Director and CEO, said: “…in terms of profitability, the second quarter is a much better quarter than the first quarter of FY22…a lot of good work has been done in managing portfolio pressures in both gold and non-gold portfolios. The SMA (Special Signal Accounts)/NPA levels were kept under control.”

He noted that CSB saw a return of demand in the SMB, SME and Whole-Sell segments during the latter part of the quarter. Moreover, notable growth is also taking place in the gold loan portfolio.

As the impact of Covid has not been fully ascertained, the bank has decided to continue its expedited provisioning policy for stressed NPA accounts, Rajendran said.

BK Divakara, Chief Financial Officer, confirmed that this is the first time the bank has posted a profit of over Rs 100 crore in a quarter. Net interest margin improved to 5.22 percent from 4.48 percent in the previous quarter of last year.

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