Banking

CSB Bank Q3 net profit up 88.5% at Rs53.05cr on higher revenues

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CSB Bank reported 36.41% growth yoy in revenues in the Dec-20 quarter at Rs599.24cr. The bank saw yoy doubling of treasury income and a sharp spike in interest earned from retail lending. However, the income from wholesale banking was tepid to weak in Dec-20.


For the Dec-20 quarter, the operating profits were sharply up 160.48% at Rs182.36cr. This growth was largely on the back of improved net interest margins (NIM) and a sharp spike in investment income. Hence the overall yields were much better. Operating margin or OPM almost doubled from 15.94% in Dec-19 quarter to 30.43% in the current quarter.


Profit after tax (PAT) for the Dec-20 quarter was up 88.52% at Rs53.05cr. This was a despite a four-fold spike in asset provisions to Rs111cr in the Dec-20 quarter. PAT margins expanded by from 6.41% in Dec-19 quarter to 8.85% in Dec-20 quarter.


Financial highlights for Dec-20 compared yoy and sequentially















CSB Bank

Rs in Crore

Dec-20

Dec-19

YOY

Sep-20

QOQ

Total Income (Rs cr)

₹ 599.24

₹ 439.29

36.41%

₹ 567.55

5.58%

Operating Profit (Rs cr)

₹ 182.36

₹ 70.01

160.48%

₹ 172.81

5.53%

Net Profit (Rs cr)

₹ 53.05

₹ 28.14

88.52%

₹ 68.90

-23.00%

Diluted EPS (Rs.)

₹ 3.06

₹ 1.63

₹ 3.97

Operating Margins

30.43%

15.94%

30.45%

Net Margins

8.85%

6.41%

12.14%

Gross NPA Ratio

1.77%

3.22%

3.04%

Net NPA Ratio

0.68%

1.98%

1.30%

Return on Assets

0.96%

0.60%

1.22%

Capital Adequacy

21.02%

23.00%

19.69%

 

Key takeaways from the Dec-20 quarter results


  • CSB Bank has seen strong traction on the treasury income and on retail banking. While the growth in profits has been strong on a yoy basis, the net profit is actually down on a sequential basis, largely on account of higher provisions made.

  • On account of the provisions made, the gross NPAs stand at just 1.7&% compared to 3.04% in the sequential last quarter. Net NPAs are also sharply lower at 0.68% compared to 1.3% in the previous quarter, indicating that most of the bad assets are provided for.

  • The capital adequacy ratio at 21% is extremely comfortable while the return on assets at 0.96% is well above the median industry average.

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