CSB Bank Third Quarters Registers Profit After Tax at Rs 175.5 Crore

MUMBAI:
The Board of Directors of CSB Bank took on record the financial results for the quarter ended 31.12.2020 (Q3 FY 2021) which were subject to limited review in their meeting dated 19.01.2021.

Profit After Tax for the nine months ended 31.12.2020 is at Rs 175.5. Cr with an RoA (annualized) of 1.07% despite having made healthy provisions in the post moratorium scenario. Q3 PAT is at Rs 53.1 Cr as against Rs 28.1 Cr in Q3 FY 20 and Rs 68.9 Cr in Q2 FY 21 with an increase of 89% over Q3 FY 20. The Operating Profit of the bank is Rs 484.3 Cr for nine months ended 31.12.2020 as against Rs 173.6 Cr for the same period last FY with a YOY growth of 179%. Q3 FY21 operating profit is at Rs 182.4 Cr as against Rs 70.0 Cr for Q3 FY20 (up by 160.5%) and Q2 FY21 figure of Rs 172.8Cr (5.5%). Net Interest Income (NII) for nine months ended FY21 stood at Rs 665.7 Cr posting a YoY increase of 53.1%. In Q3 FY21, the NII stood at Rs 251.2 Cr as against Rs 155.2 Cr in Q3 FY20 with an absolute growth
of Rs 96 Cr or 61.8 % .On a QoQ basis NII is up by 9.6%.

The improvements in quarterly ratios that supported higher NIM in Q3 FY21 vis a vis Q3 FY 20 are:
Yield on Advances – Up from 10.72% to 10.98% (10.94% -Q2 FY 21))
Cost of Deposits – Down from 5.91% to 4.91% (5.18% -Q2 FY 21)
NIM – Up from 3.92% to 5.17% (4.50% -Q2 FY 21)
Yield on investments – Up from 6.33% to 7.00%( 6.74% -Q2 FY 21)
Non-Interest Income for nine months ended FY21 stood at Rs 288.5 Cr growing YoY at 113.6%. For Q3
FY21 the figure is Rs 116.6 Cr as against Rs 50.6 Cr for the same period as compared to last year – an increase of 130.3% (Rs 97.6 Cr in Q2 FY21) with the backing of increased treasury profits, processing fee and PSLC income.
Cost Income Ratio: The ratio that was 69.53% for nine months ended FY20 has come down to 49.25% for nine months ended FY21.

Asset Quality & Provisioning
Gross NPA decreased from Rs 387 Cr as on 30.09.2020 to Rs 235 Cr as on 31.12.2020. Gross NPA as percentage of advances is at 1.77% as on 31.12.2020 where as it was 3.04% & 3.54% respectively on 30.09.2020 & 31.03.2020

Net NPA decreased from 164 Cr as on 30.09.2020 to Rs 89.5 Cr as on 31.12.2020 – a decrease of 45%. Net NPA as percentage of advances decreased from 1.30% as on 30.09.2020 & 1.91% as on 31.03.2020 to 0.68% as on 31.12.2020

Provision Coverage improves to 91.0% as on 31.12.2020 from 84.2% as on 30.09.2020 and 80.0% as on 31.03.2020. Additionally we are holding a provision of Rs 154 Cr for the stressed assets including SMA, blocked accounts etc Capital Adequacy Ratio improves from 19.69% as on 30.09.2020 to 21.02% as on 31.12.2020. Leverage
ratio is at 7.7% as on 31.12.2020.

Comfortable Liquidity Position. Liquidity Coverage Ratio at 200% which is well above the RBI requirement. Total Deposits grew by 16% YoY and CASA ratio stood at 30.4% as on December31, 2020 as against 28.6% as on December 31, 2019. Advances (Net) grew YoY at 22% mainly contributed by Gold Loan growth of 61%

Speaking about the performance Mr. C VR Rajendran, Managing Director & CEO said, “The recent revival of the economic activity is having a positive impact on the banking industry as a whole and I am happy that we are no exception to this. We could post a net profit of Rs 175 Crs for the 9 months ended 31.12.2020. In the context of the withdrawal of the moratorium benefits by the regulator, we decided to be prudent by holding provisions in excess of the regulatory provisions on the stressed assets. Apart from the core NII growth, improved trading income /provision reversals at treasury backed by the favourable yield movements, net income by way of PSLC sale etc supported us on the income side.

The key ratios viz NIM, Cost Income Ratio, RoA, RoE, Gross NPA, Net NPA, PCR & CRAR continued to be strong. On the topline front, our deposits and advances could register a YOY growth of 16% and 22% respectively. The new retail vertical with complete product suite and revamped policies will be established shortly. The new SME leadership is also working on volume growth by way of improved sourcing strategy, leveraging of` the branch network and customized product delivery. We look forward to building a sustainable business model by focusing more on these two segments apart from the gold loan portfolio. We will also have a focus on building retail
deposit base during the current quarter. While building volumes it will be our endeavor to have the right risk return matrix without compromising on the compliance standards.”