- 21 Oct 2022
- ICICIdirect Research
CSB Bank posted a healthy operational show. Treasury loss played spoiler.CSBBANK - 241 Change: -4.30 (-1.75 %)
· CSB Bank posted good set of numbers on an overall basis with NII growth of 17% YoY and 5% QoQ driven by healthy business growth and improvement in NIMs. NIM improved 38 bps YoY and 43 bps QoQ to 5.6%, attributable to faster transmission of rate hikes
· Other income was down 25% YoY and 18% QoQ mainly due to treasury losses which remained unanticipated. Treasury profits impacted due to hardening of yields and SR provision of Rs 17.4 crore. Core fee based income lines have reported healthy growth
· Increased staff count and new branch openings led to 13% YoY and 1% uptick in opex, though C/I ratio remained steady at ~57%. In Q2FY23, provision write-back of Rs 3.7 crore was reported compared to credit cost of Rs 2.9 crore in Q1FY23. PAT reported at Rs 120.5 crore; up 2% YoY and 5% QoQ, largely impacted due to treasury losses
· Asset quality improved sequentially as GNPA and NNPA were down 14 bps and 3 bps QoQ to 1.65% and 0.57%, respectively. Slippages were at Rs 42 crore vs. Rs 37 crore QoQ, while recoveries were at Rs 20 crore vs. Rs 17 crore QoQ. Restructured book declined ~9 bps QoQ to 0.41%
· Business growth was healthy as advances were up 24% YoY and 8% QoQ to Rs 17468 crore. Gold loan segment grew at a faster pace of 47% YoY and now forms ~46% of total loan book. Deposits were up 10% YoY wherein CASA deposits increased 16% YoY.
Steady performance got impacted by unanticipated treasury losses. Growth in gold loans coupled with increased diversification to aid future earnings.