CSB Bank stated it will concentrate on expanding the balance sheet more than the next 3 years, getting managed the pandemic tension effectively.
Pralay Mondal, president (retail, SME, operations and IT) of CSB Bank, told FE that managing the pandemic has been a fairly excellent story for the bank which is evident from the decent numbers in the balance sheet.
Proforma gross NPA ratio and net NPA ratio would have been 3.42% and 1.93%, respectively, as on finish of December whilst provision coverage has enhanced to 91.%.
The bank reported an 89% year-on-year (YoY) improve in its third quarter net profit to Rs 53.05 crore on larger interest and treasury revenue.
“CSB had an advantage because we did not have a large balance sheet which could create stress in a moratorium. We also did not have a large unsecured business in the ecosystem. We had repaired most of our balance sheet in SME accounts even before the COVID itself. CSB focused a lot more on gold loans and now it is almost 40% of our total portfolio,” he stated.
“Most of the secured business has come back. There has been a more responsible credit behaviour on the part of customers. Generally speaking, while there is some stress in the banking ecosystem, it is much less than what was expected or predicted,” he stated.
The Thrissur-based lender’s gross advances rose 22.64% YoY to Rs 13,425.24 crore in Q3 whilst total deposits elevated 16.48% to Rs 17,752.97 crore.
According to Mondal, CSB was a bit cautious in the course of the pandemic. “We can grow a little bit more. I think we can do better in the growth of the balance sheet and that is where we will focus now,” he stated, adding that development will come from SME loans. The strategy is to construct a robust retail and SME bank.
Mondal feels that new organization from retail, house loans and SME would more than compensate any de-development in the gold loan organization. The gold loan portfolio elevated 60.36% YoY in Q3 to touch Rs 5,633.75 crore, but sequentially, the development was merely 14%.