CSB Bank on Tuesday reported an 89% year-on-year (y-o-y) raise in its third quarter net earnings to Rs 53.05 crore on greater interest and treasury earnings.
The Thrissur-primarily 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 existing fiscal year. Non-interest earnings of the lender is noticed greater 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 earnings through 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, mostly contributed by gold loan development of 61%. Managing director & CEO C VR Rajendran mentioned current revival of the financial activity was getting a positive effect on the banking market as a complete.
“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 top quality enhanced 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 .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 soon 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 mentioned.
Its Provision Coverage has enhanced to 91.% as on December 31, 2020, from 84.2% as on September 30 and 80.% as on March 31, 2020. CSB mentioned that it was holding on top of that provision of Rs 154 crore for the stressed assets.
The board has also authorized the roll-out of a voluntary retirement scheme (VRS) for its employees members. Rajendran mentioned 223 employees members have been eligible for the VRS and the total outgo would be Rs 80 crore if all of them opt for the VRS.