CSB Bank gains 7%, hits record high post June quarter business update

CSB Bank reported a 3.5 per cent QoQ decline in gross advances to Rs 14,146 crore

Shares of CSB Bank hit a record high of Rs 372.95, up 7 per cent on the BSE in intra-day trade on Monday after the lender released a business update for the April-June quarter of the financial year 2021-22 (Q1FY22). The stock surpassed its previous high of Rs 362.50 touched on June 30, 2021.

CSB Bank said its total deposits increased 14.17 per cent year-on-year (YoY) to Rs 18,652.80 crore as of June 30, 2021 (Q1FY22) from Rs 16,337.95 crore in the same period last year (Q1FY21). On a quarter-on-quarter (QoQ) basis, the total deposits declined 2.5 per cent from Rs 19,140 crore as of March 31, 2021 (Q4FY21). CASA and term deposits were up 29 per cent and 8 per cent, respectively on a YoY basis.

CSB Bank reported a 3.5 per cent QoQ decline (up 23.7 per cent YoY) in gross advances to Rs 14,146 crore. Growth was mainly affected by a decline of 8 per cent QoQ in the gold loan portfolio. The sequential decline in gold loans was driven by subdued disbursements due to lockdowns announced by various key states and shorter tenure of gold loans, which resulted in higher repayments. That said, gross advances, excluding gold loans, were broadly flat QoQ (up 12.3 per cent YoY). The share of gold loans in the total mix thus declined by around 200 basis points (bps) QoQ to 39.7 per cent.

As per the latest RBI data points, the systemic credit growth also remained weak at 5.8 per cent YoY (1 per cent decline in FY22 YTD) as of June 18, 2021.

“Moderation in the Gold loans portfolio was affected by subdued disbursements. Growth for some key banks such as Federal Bank, Karur Vysya Bank, South Indian Bank, and DCB Bank would be key to watch in the near term as they have a strong Gold loan portfolio and have reported healthy growth in recent quarters,” Motilal Oswal Financial Services said in an update.

At 01:52 pm, CSB Bank was trading 5 per cent higher at Rs 364 on the BSE, as compared to a 0.67 per cent rise in the S&P BSE Sensex. The trading volumes on the counter had more-than-doubled, with a combined 2.1 million shares having changed hands on the NSE and BSE so far.