Kerala-based CSB Bank on Wednesday reported more than two-fold increase in its March quarter net profit to ₹53.6 crore on a healthy rise in core interest and treasury incomes.

The bank reported profit growth despite a steep increase in overall provisions to ₹57.5 crore as against Rs 10.1 crore in the year-ago period.

Its chief executive and managing director CVR Rajendran said a bulk of the extra provisions was due to the COVID-19 pandemic, but underlined that it does not worry a lot about asset quality going ahead.

Over 70 per cent of loan accounts are having regular payments, while 18 per cent of advances excluding ones to the safer asset of gold loans are classified as being under moratorium, he said.

The gross non-performing assets ratio improved to 3.51 per cent as of June as against 4.71 per cent in the year-ago period and the advances overdue for 31-90 days were only ₹22 crore in an over Rs 11,000-crore book.

The bank’s core net interest income rose 39.86 per cent to ₹185.3 crore on widening of the net interest margin to over 4 per cent, while the other income grew 12 per cent to ₹30.8 crore.

The treasury operations reported an income of ₹43.5 crore as against ₹2.9 crore in the year-ago period.

Rajendran said retail will be a big focus during FY2021 and added that larger peer Axis Bank’s retail head Pralay Mondal will be taking charge this quarter to steer CSB’s retail franchise.

Mondal can be a candidate to eventually take over as the chief of the bank, Rajendran said, adding that he is around till the end of 2022.

The bank is also looking to increase its branch network by 100 during FY21, Rajendran said, adding that it has already done nearly 35 branches during the pandemic as furnished properties are available for cheap.

He said it will be looking to take full advantage of the loan- to-value ratio increase in gold loans offered by RBI and use it to grow the overall book.

CSB Bank shares gained 13.23 per cent to close at ₹225.45 on the BSE on Wednesday.

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