I am delighted to make my maiden address to the stakeholders of CSB Bank as Chairman ofthe Board. With the support from the Board of Directors RBI and our shareholders I amconfident of successfully delivering my responsibilities. Since my joining the Board inDecember 2018 I have been observing the Board of Directors and senior managementmeticulously following the governance and risk management norms. The entire team at CSBBank under the leadership of our MD & CEO Mr. C. VR. Rajendran has ensured theeffective implementation of our renewed strategies. This includes a prudent riskassessment business expansion reducing the NPAs and turning the underperforming bank toa new age profit making entity. In FY20 CSB Bank had achieved 100 years of its gloriousexistence. During the Bank's centenary celebrations the founders of the Bank wereremembered who had the vision to create an institution for providing employment andlivelihood to a large section of the society. It was also a coincidence that during its100th Year your Bank came out with its highly successful IPO and the Bank'sshares were also listed on the bourses adding another golden feather on its hat. Againin its 101st year your Bank opened 101 new branches across India. A centuryold trust capital along with renewed strategies has enabled your Bank to script a successstory to emulate. Amidst stress and difficulties in survival in the Indian banking sectorwe are among few banks in the recent past who not only survived maintaining our ownidentity but successfully turned around on a well-defined glide path.
In banking judicious provisioning is akin to sustainable risk management. Bank's NPAprovisions increased by Rs.60 crores during the year consequent mainly due to theaccelerated provisioning policy of the Bank in view of the prevailing uncertainties.Standard asset provisions have increased by 110 crores which include the covid relatedprovision of around 25% on stressed assets starting from one-day default. Your Bank alsohas been providing 25% on the restructured accounts having more credit risk based on themanagement judgement as against a requirement of only 5%. The excess provisions held overand above RBI provisioning norm amounts to approximately
Rs.250 crores as on 31.03.2021.
AMIDST STRESS AND DIFFICULTIES IN SURVIVAL IN THE INDIAN BANKING SECTOR WE ARE AMONGFEW BANKS IN THE RECENT PAST WHO NOT ONLY SURVIVED MAINTAINING OUR OWN IDENTITY BUTSUCCESSFULLY TURNED AROUND ON A WELL-DEFINED GLIDE PATH.
STANDARD ASSET PROVISIONS HAVE INCREASED BY 110 CRORES WHICH INCLUDE THE COVID RELATEDPROVISION OF AROUND 25% ON STRESSED ASSETS STARTING FROM ONE-DAY DEFAULT. YOUR BANK ALSOHAS BEEN PROVIDING 25% ON THE RESTRUCTURED ACCOUNTS HAVING MORE CREDIT RISK BASED ON THEMANAGEMENT JUDGEMENT AS AGAINST A REQUIREMENT OF ONLY 5%.
Since we began our transformation journey we at CSB Bank have been building in themuch needed operational resilience. We are ahead of the industry in terms of managingNPAs provisioning expanding our markets especially in retail gold loans and SME space.
I am delighted to say that in FY20 the Bank showed early signs of a turnaround and inFY21 the Bank has put on record a stellar performance despite following stringentprovisioning norms. Congratulations to the team CSB for this path-breaking performance.This resulted in a significant improvement in all key performance ratios earnings pershare improved from Rs.0.88 to Rs.12.59 and Book value per share rose from Rs.113.04to Rs.125.67. These stellar results had been well taken note of by the investors'community thus pushing the market capitalisation to Rs.6000 crore mark postdeclaration of this year's results the best ever market capitalisation post listing ofshares of the Bank.
I thank the Central Bank and promoters for all the support and guidance. Even duringthe difficult times our customers and shareholders continued to repose faith in the Bankand they are indeed partners in our progress. My sincere thanks to them while I seek theircontinued patronage. My colleague Mr. C. VR. Rajendran MD & CEO will elaborate moreon our performance in his address. Banks need to embrace technology and keep updating theacquired technology for delivering customer
A SIGNIFICANT IMPROVEMENT IN ALL KEY PERFORMANCE RATIOS EARNINGS PER SHARE IMPROVEDFROM Rs.0.88 TO Rs.12.59 AND BOOK VALUE PER SHARE ROSE FROM
Rs.113.04 TO Rs.125.67. THESE STELLAR RESULTS HAD BEEN WELL TAKEN NOTE OF BYTHE INVESTORS' COMMUNITY THUS PUSHING THE MARKET CAPITALISATION TO Rs.6000 CROREMARK POST DECLARATION OF THIS YEAR'S RESULTS.
experience as well as to be able to compete with the fintech companies in creditdelivery. Digitalization is engraved in our strategy and in recent years we have madestrides in rolling out various internet and mobile banking options. During the year theBank has launched a virtual account opening application and WhatsApp banking. Further ourteam along with our technology partners are working on enhancing the Bank's digitalcapabilities. The increased number of internet banking users in FY21 is proof that ourdigital strategies are delivering results.
Corporate Governance Philosophy
Transparency between the shareholders and prudent risk management are the cornerstonesof effective corporate governance. As a significant player in the country's financialsystems any nonconformity to governance norms can jeopardize the Bank's very survivalleading to exposing customers employees and investors to enormous financial risks. Inrecent years we have seen a few financial entities going through adverse situationsleading the regulators to press the reboot button. The Corporate Governance Philosophy ofthe Bank is to promote corporate fairness transparency and accountability so as tomaximize long-term value for all stakeholders. Your Bank is committed to high standards ofcorporate governance practices and upholds fairness and trust in all its dealings with itsstakeholders in line with its Corporate Governance Philosophy. This philosophy isrealized through the Bank's endeavour in working towards portfolio operational andreputation excellence. Bank in tune with Corporate Governance Philosophy follows theprinciples of arm's length basis' relationship and follows regulatory compliance inits all dealings with related parties. In practice it follows a more conservativeapproach than even what the policy had laid down. I believe this Philosophy helped theBank to be rated as the second-best bank among all banks by Forbes Business Magazinebased on the parameters of general satisfaction and key attributes like trust feesdigital services financial advice etc.
FY21 has been a challenging year for the global economy as the consequences of theCOVID-19 hitting most of the sectors. As the signs of devastation began to recede with thebeginning of the vaccination most economies started recovering in the last quarter ofCY20 - including India. While the Government Central Bank and research agencies expecteda quick turnaround and an economic rebound in India the second wave of the pandemichowever is posing enormous challenges creating an atmosphere of uncertainties. At the CSBBank we will closely monitor the external situation as well as keep ourselves agile tomitigate its impact. We will continue to be a socially committed Bank. In FY20 we ensuredstability and in FY21 we have embarked on our journey towards profitability and growth.Our primary objective is to ensure governance and customer delight while creating valuefor our shareholders. Our workforce is becoming younger year on year. By aligning themwith the Bank's vision we are able to build an efficient workforce and ensure theirprofessional growth. In the coming years we will also explore avenues for increasing yourBank's contribution to society under our CSR initiatives. At the same time we are alsolooking after the wellbeing of the CSB family in the fight against the Covid. Across theworld climate change has a huge impact on financial institutions. It comes with risks aswell as opportunities. On the risk side we will monitor the impact of climate change onsegments in our business banking portfolios. We will also move towards sustainable bankingthrough financing energy efficient business models. As we are becoming a digitally enablednew age Bank we are contributing to the planet by reducing fossil fuel consumption andresources. Going forward our strategic focus will remain on year-on-year growth. We helpmany entrepreneurial aspirations succeed through our retail and SME loan products. Themajority of your Bank's clients are micro and small businesses who are pillars of theeconomy. Amidst economic uncertainties we have a social business responsibility to makethe credit available for those who bank on us. At the same time we must ensure that thedelivered credit is secured. The Board and senior management of the Bank are gearedtowards managing this twin responsibility. I wish to make a special mention on theinvaluable contribution of Mr. Madhavan Menon my predecessor chairman for setting up agood corporate governance framework in the Bank and also the sheer professionalism that hedisplayed during his tenure by sharing unbiased decisive and professional opinionskeeping in view of all the stakeholders' interest at hand and setting the Bank on anall-round recovery path. I would like to conclude by thanking all our customers for theircontinued patronage associates partners and other well-wishers for creating value andfor strengthening our strategic intent the Central Bank and the Securities and ExchangeBoard of India and the stock exchanges for all the help and guidance on regulatorycompliance. I also thank Govt. of India various state governments in particularGovernment of Kerala and government agencies for the administrative guidance and help theyhave been extending. Stay Safe.