CSB Bank expects to develop by 20-22% in the existing economic year regardless of a slowdown in development in the gold loan enterprise.
In the next fiscal, the bank expects to develop by 25% each in advances and liabilities, with its new group of officials becoming functional by April 2021 ,MD and CEO CVR Rajendran stated.
“We are seeing good enquires from the SME and mid-size corporates. Retail demand is also back.Demand is good in the agro-processing and auto ancillary sector,” he added.
Total advances grew 21.6% year-on-year (y-o-y) to Rs 13,137.3 crore in the course of the third quarter, with the gold loan portfolio developing by pretty much 60.7 % y-o-y to `5,644 crore. Sequentially, the gold loan portfolio grew only 14 % .
“Gold loan has tapered down during Q3 .Gold prices have become volatile and have also fallen. We have gradually reduced the LTV from 82 %. Our average LTV for the current portfolio would be 70-75%,” he added.
The Thrissur-based lender reported a 89 % y-o-y boost in its third quarter net profit to Rs 53.05 crore on greater interest and treasury revenue.
Regarding the NIM, Rajendran stated that NIM of 5.17 % can’t be maintained for extended as there is pricing challenges in most sectors. He added that the perfect NIM for the bank would be above 4 % in the extended-run. “COVID has not had the impact which we had anticipated. We have build up a huge reserve for it. Provision Coverage Ratio is 91% and apart from it there is standard provisioning don’t think so much will be required and we will slowly unwind going forward,” he stated.
“Accounts which would have been classified as NPA but for Supreme Court embargo,excluding restructured, totalled Rs 195 crore. We are keeping 25% provision on these accounts. Out of Rs 195 crore, Rs 130 crore or 70% are gold loan accounts which we count on to recover without the need of any hitches or glitches,’ he added.
On the VRS scheme the bank introduced final quarter, he stated that only 33 workers of the 223 who are eligible have opted for it.
He added that the bank has opened 60 branches in the existing fiscal from the planned one hundred branches .