Conference Call with CSB Bank Management and Analysts on Q2FY22 Performance and Outlook. Listen to the full earnings transcript.
Highlights: Profit After Tax: Bank recorded a net profit of Rs 118.57 Cr in Q2 FY 22 as against Rs 68.90 Cr in Q2 FY 21 and Rs 61.00 Cr for the sequential quarter. Net profit increased by 72% Y-o-Y and 94% on Q-o-Q basis. On a half yearly basis, the net profit improved to Rs 179.57 Cr as on 30.09.21 from Rs 122.46 as on 30.09.20 or by 47%. Bank continued its accelerated provisioning policy during this quarter as well. The RoA as on 30.09.2021 on a half yearly basis is 1.53% Operating Profit of the bank is Rs 324.12 Cr for the half year ended 30.09.2021 with an increase of 36% over H1 FY 21. Q2FY22 operating profit is at Rs 149.38 Cr as against Rs 119.02 Cr for Q2 FY21. Operating profit for Q2FY22 but for the regulatory changes is Rs 181.2 Cr as against Rs 179.8 Cr for Q1FY22 Net Interest Income for (NII) for H1FY22 stood at Rs 546.14 Cr posting an increase of 32% over H1 FY 21. In Q2 FY 22, the NII stood at Rs 278.38 Cr as against Rs 229.25 Cr in Q2 FY 21 or by 21 %. Non-Interest Income posted a growth of 21.39% half yearly and 36.44% on a quarterly basis Y-o-Y. Cost Income Ratio: Though the staff count has gone up over 1250 from last September, the cost income ratio as on 30.09.2021 on a half yearly basis could be maintained at 52.14% as against 54.45% as on 30.09.2020. Cost income ratio for Q2 FY 22 is at 55.83%, which was at 56.41% for Q2 FY 21 & 48.45% in Q1FY22. Asset Quality & Provisioning With the opening up of the economy, positive trends are visible in the asset quality front. Out of the gross NPA of Rs 586.83 Crs, Rs 287.52 Crs is gold NPA where the recoverability is almost assured. Our gross NPA excluding gold as on 30.09.21 is lower than the position as on 30.06.21 and 31.03.21. Gross NPA and Net NPA ratios have improved to 4.11% and 2.63% as on 30.09.21 from 4.88% and 3.21% respectively as on 30.06.21. Gross NPA and Net NPA ratios excluding gold works out to 2.09% and 1.14% as on 30.09.2021 Capital Adequacy Ratio is at 20.12%, which is well above the regulatory requirement. Leverage ratio is at 8.03% as on 30.09.2021. Comfortable Liquidity Position. Liquidity Coverage Ratio is comfortable at 169.93 % Total Deposits grew by 9.12% YoY and CASA ratio stood at 32.60 % as on 30.09.2021 as against 29.39% as on 30.09.2020 and 32.19% as on 31.03.2021 Advances (Net) grew by 12.22% to Rs 14070.11 Cr as on 30.09.2021 Speaking about the performance Mr. C VR Rajendran, Managing Director & CEO said, “An optimistic outlook has started prevailing in the economy. The well-coordinated efforts of all the required machineries and substantial pick up in vaccination drive have helped to normalize the Covid impact and to open up the economy. The uptick in demand is expected to be strengthened by the upcoming festive seasons, resilient agri sector, increased government capex and exports. For CSB, in terms of profitability, Q2 is a much better quarter than Q1 FY 22 and we registered an increase of about 94% sequentially. Lot of good work has gone in managing the portfolio stress both in gold and non- gold portfolios and SMA/NPA levels were kept under control. Though treasury could not contribute much on the other income front, the gap was more or less covered by way of increased PSLC /Bancassurance/Fee incomes. As the impact of COVID is not fully ascertained, Bank decided to continue with the accelerated provisioning policy for stressed and NPA Accounts. The key ratios like NIM, CRAR, LCR, RoA etc continues to be strong. We have experienced the returning of demand in MSME, SME and WSB segments during the last part of the quarter. Visible growth is also happening in Gold loan portfolio. In terms of growth, we look forward for better traction and results in the third quarter. With the product and process improvements both implemented/proposed, we intend to capture a better share of the retail segment and grow both the retail liabilities and assets. So we look forward to improve our performance in both the topline and bottom line parameters in the coming quarters as well. Result PDF