CSB Bank (erstwhile Catholic Syrian Bank) has undergone a transformation in last few years after Mr CV Rajendran was appointed as CEO in Dec-16 and after RBI took an exception and permitted a 51% stake by Fairfax India Holdings in Jul-2018. From strengthening its top management, to moving towards product based lending approach, along with balance sheet clean up and improvement in core operating metrics, the bank is now well placed for growth along with adequate capital backing. We expect RoAs to rise to 1.3/1.4% by FY22E/23E led by improving PPoP profile and decline in credit costs.
OutlookWe initiate with an BUY rating with TP of Rs320, valuing the bank at 2.2x Mar-23 P/ABV.
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