CSB Bank on Tuesday reported an 89% year-on-year (y-o-y) increase in its third quarter net profits to Rs 53.05 crore on higher interest and treasury income.
The Thrissur-based lender had reported a net profit of Rs 28.1 crore in Q3 FY20 and Rs 68.9 crore in the second quarter of the current fiscal year. Non-interest income of the lender is seen higher by 130% year on year at Rs 116 crore for the third quarter of FY21 against Rs 50.6 crore in the year-ago period. Total income during the period rose to Rs 599.24 crore from Rs 439.29 crore.
Total deposits grew 16% YoY and CASA ratio stood at 30.4% as on December 31, 2020, against 28.6% as on December 31, 2019. Advances (net) grew at 22% YoY, mainly contributed by gold loan growth of 61%. Managing director & CEO C VR Rajendran said recent revival of the economic activity was having a positive impact on the banking industry as a whole.
“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 CBS Bank CEO added.
Asset quality improved with gross non-performing assets (NPAs) as a percentage of gross advances at 1.77 % from 3.04 % in the preceding quarter. While net NPA declined to 0.68 % in the December quarter from 1.30 % in the September quarter and 1.98 % in the year-ago quarter.
However, had the bank classified borrower accounts as NPA after August 31, 2020, its proforma Gross NPA ratio and proforma Net NPA ratio would have been 3.42% and 1.93%, respectively, the bank sources said.
Its Provision Coverage has improved to 91.0% as on December 31, 2020, from 84.2% as on September 30 and 80.0% as on March 31, 2020. CSB said that it was holding additionally provision of Rs 154 crore for the stressed assets.
The board has also approved the roll-out of a voluntary retirement scheme (VRS) for its staff members. Rajendran said 223 staff members were eligible for the VRS and the total outgo would be Rs 80 crore if all of them opt for the VRS.