CSB Bank spurted 11.50% to Rs 222 after net profit surged 174.10% to Rs 53.56 crore on a 28.84% jump in total income to Rs 496.88 crore in Q1 June 2020 over Q1 June 2019.
Profit before tax (PBT) soared 138.21% to Rs 71.56 crore in Q1 FY21 as against Rs 30.04 crore in Q1 FY20. Tax expense surged 71.42% to Rs 18 crore during Q1 June 2020 compared with Rs 10.50 crore Q1 June 2019. The result was declared during trading hours today, 19 August 2020.
The bank's gross non-performing assets (NPAs) stood at Rs 401.03 crore as on 30 June 2020 as against Rs 409.43 crore as on 31 March 2020 and Rs 513.41 crore as on 30 June 2019. The ratio of gross NPAs to gross advances stood at 3.51% as on 30 June 2020 as against 3.54% as on 31 March 2020 and 4.71% as on 30 June 2019. The ratio of net NPAs to net advances stood at 1.74% as on 30 June 2020 as against 1.91% as on 31 March 2020 and 2.04% as on 30 June 2019.
The bank's provisions and contingencies soared 471.30% to Rs 57.53 crore in Q1FY21 over Rs 10.07 crore in Q1FY20. Provision Coverage Ratio (PCR) improved to 81.7% as on 30 June 2020 from 79.9% as on 30 June 2019 and 80% as on 31 March 2020.
As per RBI guidelines, in respect of accounts in default but standard as on 29 February 2020 where the asset classification benefit is extended, bank is required to make general provision of not less than 10% of the total outstanding of such accounts. Accordingly, the bank has recognised provision of 10% on the total outstanding of such accounts as on 30 June 2020, aggregating to Rs 12.96 crore in the quarter ended 30 June 2020 as compared to Rs 1.62 crore in the quarter ended 31 March 2020.
Additionally, as a prudent measure, during the current quarter, the bank has made additional provision of 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 as on 30 June 2020 stood at Rs 44.21 crore.
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The operating profit of the bank increased to Rs 129.10 crore as on 30 June 2020 from Rs 40.10 crore as on 30 June 2019, registering a Y-o-Y (year-on-year) increase of 221.85%. It also registered an increase of 20.66% over Q4 FY20 due to improved NII and treasury profits.
In Q1 FY21, the bank earned a Net Interest Income (NII) of Rs 185.30 crore as against Rs 132.50 crore with an absolute growth of Rs 52.80 crore or 40% Y-o-Y & 18% Q-o-Q (quarter-on-quarer). Net Interest Margin (NIM) improved to 4.06% in Q1 FY21 from 3.45% in Q1 FY20.
Capital Adequacy Ratio (CAR) improved to 18.93% as on 30 June 2020 from 16.88% as on 30 June 2019. The reduction in CRAR from March 2020 level of 22.46% is on account of the increased Non SLR & AFS portfolios. Leverage Ratio improved to 8.17% as on 30 June 2020 from 6.62% as on 30 June 2019. Liquidity coverage ratio stood at 232% comfortably above the RBI requirement of 80%. Deposits grew by Rs 706 crore in April-August 2020 with a growth rate of 4.50%.
CASA mix improved to 29.23% as on 30 June 2020 from 28.11% as on 30 June 2019 while net advances grew at 5.88% Y-o-Y.
Commenting on the Q1 performance, CVR Rajendran, the managing director (MD) & chief executive officer (CEO) of CSB Bank, has said that: "The results of the first quarter of FY 21 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%. 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."
CSB Bank is an Indian private sector bank with its headquarters at Kerala, India.
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