Slides down; Expects gold lending growth to pick up

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CSB Bank on Monday announced a 72 percent increase in net profit to Rs 118.57 crore in the second quarter ending in September. The Kerala-based private sector lender had reported a net profit of Rs 68.90 crore in the corresponding quarter of the previous fiscal year.

Total income in the July-September quarter of fiscal 22 reached Rs.555.64 crore, compared to Rs.513.77 crore in the previous year quarter, CSB Bank said in a regulatory filing. On the asset front, the bank’s non-performing assets (APM) stood at 4.11% of gross advances in September 2021, up from 3.04% a year ago.

In absolute terms, gross non-performing assets (NPA) stood at Rs 586.83 crore, more than Rs 387.42 crore reported in the same quarter a year ago. Net NPAs or bad debts stood at 2.63 percent (Rs 370 crore) against 1.30 percent (Rs 163.52 crore).

Regarding slippages, CVR Rajendran, chief executive officer and CEO of the company, said: “Slippages have decreased significantly compared to the first quarter, most of the slippages in the first quarter were just gold lending and the current slips. are very low. The gold loan shows around Rs 280 crore slippage as of date, which can be clawed back over the next two quarters.

He added, “As for the slippages in other loans, it’s a lot less than the turnaround we’ve done. This therefore results in a reversal of a provision that we have made for credits other than gold. So slippage in the future will decrease significantly and there will be more and more rewrites in the coming quarters. “

Regarding loan growth, Rejendran said: “The focus has been more on the recovery because last year, with a higher loan relative to asset value, the portfolio grew faster. This year, we have significantly reduced the loan to its asset value. NBFCs and others get less than asset value loans, people naturally turn to NBFCs or private lenders for those looking for more money with the same jewelry. So naturally the portfolio went down. Other than that, the focus is only on collections and not on loans. “

“Starting this quarter, you will see a pull in gold lending and gold lending growth will pick up to the same level as before. Expect around 10-15% growth in the gold loan portfolio.

Regarding the COVID situation in Kerala, Rejendran said Kerala has fully opened up, activities have resumed to normal level and there is no problem. The functioning of the courts has not yet resumed at full capacity and priority is given to the most important cases. So there is some delay in the recovery process.

For a full management commentary, watch the video.

-With PTI inputs

First publication: STI


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