CSB Bank to focus on growing balance sheet

CSB Bank said it will focus on growing the balance sheet over the next three years, having managed the pandemic stress well.

Pralay Mondal, president (retail, SME, operations and IT) of CSB Bank, told FE that managing the pandemic has been a pretty good 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 end of December while provision coverage has improved to 91.0%.

The bank reported an 89% year-on-year (YoY) increase in its third quarter net profit to Rs 53.05 crore on higher interest and treasury income.

“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 said.

“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 said.

The Thrissur-based lender’s gross advances rose 22.64% YoY to Rs 13,425.24 crore in Q3 while total deposits increased 16.48% to Rs 17,752.97 crore.

According to Mondal, CSB was a bit cautious during 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 said, adding that growth will come from SME loans. The plan is to build a strong retail and SME bank.

Mondal feels that new business from retail, home loans and SME would more than compensate any de-growth in the gold loan business. The gold loan portfolio increased 60.36% YoY in Q3 to touch Rs 5,633.75 crore, but sequentially, the growth was merely 14%.