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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