CSB Bank's Q2 pre-tax profit up 137% to Rs 82 crore, 56% spike in NII

CSB Bank Ltd has reported a 137.4 per cent surge in PBT to Rs 92.1 crore during the quarter ended September 30, 2020, from  Rs 38.8 crore a year ago. Interest income rose by 24.7 per cent to Rs 470 crore from Rs 376.9 crore, a year ago.

The bank's Covid-19 provisions stood at Rs 15.6 crore during the quarter, while other provisions stood at Rs 65.2 crore as compared to Rs 24.6 crore, up 164.9 per cent.

Net Interest Income (NII) stood at Rs 229.2 crore as against Rs 147 crore in Q2 FY 20 with an absolute growth of Rs 82.20 crore or 56 per cent YoY and 23.7 per cent QoQ. 

The factors that supported higher NII in the second quarter of fiscal 2021 vis-a-vis Q2FY20 are yield on advances which rose by 10.33 per cent, a 5.18 per cent drop in cost of deposits, NIM rising to 4.5 per cent from 3.69 per cent and yield on investments rising to 6.74 per cent from 6.52 per cent.

Gross NPA decreased from Rs 401 crore as on June 30, 2020 to Rs 387 crore as on September 30, 2020. Gross NPA as percentage of advances stood at 3.04 per cent as on September 30, 2020 against 3.51 per cent and 3.54 per cent, respectively on June 30, 2020 and March 31, 2020. Net NPA decreased 16 per cent from 195 crore on June 30, 2020 to Rs 164 crore on September 30, 2020. 

Net NPA as percentage of advances decreased from 1.74 per cent as on June 30, 2020 and 1.91 per cent as on March 31, 2020, to 1.30 per cent as on September 30, 2020 

Provision coverage improved to 84.24 per cent as on September 30, 2020 from 81.7 per cent as on June 30, 2020 and 80 per cent as on March 31, 2020. 

Capital Adequacy Ratio improved from 18.93 per cent as on June 30, 2020 to 19.69 per cent as on September 30, 2020. Leverage ratio was 7.52 per cent on September 30, 2020. 

Total Deposits grew by 13 per cent YoY and 7 per cent QoQ. CASA ratio stood at 29.4 per cent as on September 30, 2020, as against 28.17 per cent as on September 30, 2019. Advances (Net) grew YoY at 11 per cent and QoQ at 12 per cent gold loans grew at 47 per cent YoY and 29 per cent QoQ.

CSB Bank amended terms of the investment agreement with Fairfax to align it with the bank's Articles of Association. The bank has amended and restated the investment agreement dated October 15, 2018, which was executed between the bank and FIH Mauritius Investments Ltd. (FIHM) in relation to acquisition of 51% in the paid up capital of the bank by FIHM. According to the new amendment, the Board of Directors shall consist of a maximum of 11 directors, including the investor directors. Earlier, the investment agreement provided for a maximum of 7 Directors on the Board of Directors.