Asset quality improved during the quarter, with gross non-performing assets as a percentage of gross advances falling 80 bps QoQ to 4.1 percent and net NPA declining 60 bps to 2.6 percent
Private sector lender CSB Bank on October 25 recorded a 72.1 percent year-on-year growth in standalone profit at Rs 118.6 for the September 2021 quarter after provisions written-back and asset quality improved during the period.
The Kerala-based bank has reported a profit of Rs 68.9 crore in the year-ago quarter.
Net interest income, the difference between interest earned and interest expended, grew 21.4 percent year-on-year to Rs 278.4 crore, while loan growth was at 12.2 percent.
Advances increased to Rs 14,070.11 crore during the quarter, up from Rs 12,537.61 crore in the same quarter last year, while deposits grew by 9.09 percent to Rs 19,055.49 crore in Q2FY22.
“In terms of profitability, Q2 is a much better quarter than Q1 FY22 and we registered an increase of about 94 percent sequentially. A lot of good work has gone in managing the portfolio stress both in gold and non-gold portfolios and SMA/NPA levels were kept under control. Though treasury could not contribute much on the other income front, the gap was more or less covered by way of increased PSLC /Bancassurance/Fee incomes,” said C VR Rajendran, Managing Director & CEO.
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As the impact of Covid had not been fully ascertained, the bank decided to continue with the accelerated provisioning policy for stressed and NPA accounts, he added.
Asset quality improved during the quarter, with gross non-performing assets (NPA) as a percentage of gross advances falling 80 bps QoQ to 4.1 percent and net NPA declining 60 bps to 2.6 percent.
The bank has written back provisions and contingencies of Rs 9.1 crore during the quarter. Provisions and contingencies reported in Q1FY22 at Rs 93.2 crore and in Q2FY21 at Rs 26.9 crore.
Non-interest income (other income) increased 36.5 percent year-on-year to Rs 59.8 crore in the quarter despite treasury loss, aided by priority sector lending certificates (PSLC) income and commissions.
The stock initially reacted strongly and rallied 10 percent but at 14.55 pm cooled down to trade with a percent gain at Rs 309 on the BSE.