CSB Bank Q2 net rises marginally to Rs 120 crore

CSB Bank | CMP: Rs 234.20 | The stock gained more than 2 percent after the private sector lender said the board of directors has approved an appointment of Pralay Mondal as the Managing Director & CEO of the bank, for a period of three years with effect from September 15.

Private sector lender CSB Bank on Friday reported a marginal increase in its September quarter net profit at Rs 120.55 crore, restricted by a heavy decline in non-interest income.

The South-based bank had reported a net profit of Rs 118.57 crore in the year-ago period. Its core net interest income climbed 17 per cent to Rs 310.7 crore for the reporting quarter on the back of a 24 per cent jump in loans and the net interest margin expanding to 5.6 per cent.

The non-interest income dropped 25 per cent to Rs 44.9 crore for the reporting quarter. Its managing director and chief executive Pralay Mondal attributed the fall in other income to over Rs 10 crore in provisions that had to be made towards security receipts for vintage sour asset sales and the rate hikes related reverses in the investment portfolio.

Its managing director and chief executive Pralay Mondal attributed the fall in other income to over Rs 10 crore in provisions that had to be made towards security receipts for vintage sour asset sales and the rate hikes related reverses in the investment portfolio.

There was also no income earned from the sale of priority sector lending certificates, where the bank finds the rates offered low now, he added. Mondal said the net interest margins (NIMs) are not sustainable at such a high levels and will slide down gradually to around 5 per cent over the long term.

The bank is keen to partner with fintechs for various products and is presently investing in the technologies which will be needed for efficient distribution, Mondal added. The gross non-performing assets (NPA) ratio improved to 1.65 per cent at the end of the quarter as against 1.79 per cent in the year-ago period.

The capital adequacy ratio stood at a comfortable 25.14 per cent as on September 30, 2022. The company scrip closed 6.89 per cent down at Rs 233 apiece on the BSE, as against gains of 0.18 per cent on the benchmark.