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CSB Bank Q1 results: Firm posts highest-ever quarterly profit of Rs 54 crore; Stock jumps 12%

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CSB Bank Q1 results: Firm posts highest-ever quarterly profit of Rs 54 crore; Stock jumps 12%

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CSB Bank on Wednesday reported 176 percent rise in net profit at Rs 53.6 crore during the quarter ended June 30.

CSB Bank Q1 results: Firm posts highest-ever quarterly profit of Rs 54 crore; Stock jumps 12%
CSB Bank on Wednesday reported 176 percent rise in net profit at Rs 53.6 crore during the quarter ended June 30. In the corresponding quarter last year, the Thrissur-based bank posted a net profit of Rs 19.5 crore. 
Net interest income during the quarter rose 40 percent to Rs 185.3 crore from Rs 132.4 crore. Net Interest Margin improved to 4.06 percent from 3.45 percent, YoY. Other income rose significantly to Rs 74.3 crore from Rs 30.2 crore YoY.
Asset quality improved as gross non-performing assets (NPA) fell to Rs 401.03 crore from Rs 409.43 crore, while net NPA declined percent to Rs 195.24 crore from Rs 216.94 crore, sequentially.
Gross NPA as a percentage of gross advances fell marginally to 3.5 percent from 3.54 percent and net NPA as a percentage of net advances decreased by bps to 1.74 percent from 1.91 percent, QoQ.
Provisions in Q1FY21 were at Rs 57.53 crore versus Rs 84.32 crore QoQ and versus Rs 10.07 crore YoY. Provision Coverage Ratio improved to 81.7 percent as on June 30, 2020 from 79.9 percent as on June 30, 2019 and from 80.0 percent as on March 31, 2020.
The bank said that according to RBI directive, it has recognised provision of 10 percent on the total outstanding of such accounts as on June 30, 2020, aggregating to Rs 12.92 crore in the quarter ended June.
"Additionally, as a prudent measure, during the current quarter, the bank has made an additional provision of Rs 31.30 crore, against the likely impact of COVID-19 pandemic in respect of exposure of the bank based on assessment of presently available information. The aggregate provision against the likely impact of COVID-19, including the RBI mandated provision, stands at Rs 44.22 crore," the lender said.
Capital Adequacy Ratio (BASEL-III) in Q1FY21 was at 18.93 percent versus 22.46 percent QoQ and versus 16.88 percent YoY. The reduction in CRAR from March level is on account of the increased non SLR & AFS portfolios, the bank said.
"The results of the first quarter of FY21 underlines the fact that the bank is now well entrenched in earnings growth path despite testing times. Rs 54 crore net profit is the highest quarterly profit declared by our bank. This is after making healthy COVID 19 related provisions for Standard Assets on a proactive basis. We have used to the maximum advantage the TLTRO window of RBI and the results are evident in the improved NIM, which has crossed 4 percent,” said C VR Rajendran, managing director and chief executive officer, CSB Bank.
“Going forward, the key focus this fiscal will be to grow the gold loan book taking advantage of the relaxations in LTV by RBI while remaining ever vigilant of gold price volatility. New Retail banking team headed by Mr Praloy will be in place by this quarter end and we expect green shoots on non-gold retail from the third quarter,” he added.
The shares of CSB Bank surged after the announcement of the results. At 2:30 pm, the stock was trading 12 percent higher at Rs 223.00 on the BSE.
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