Mumbai, Jul 22 (PTI) South India-based CSB Bank on Thursday reported a 13.89 per cent increase in its June quarter net at Rs 61 crore but witnessed reverses in asset quality, especially the largest segment of gold loans.
The overall slippages came at Rs 423 crore for the quarter, of which gold loans were at Rs 337 crore.
Its managing director and chief executive C V R Rajendran explained that the bank did not press recovery efforts on loans despite the collection rates dropping to only 20 per cent and opted for giving more time to borrowers given the COVID challenges.
He said the advances overdue for 30 to 89 days stand at over Rs 320 crore and reverses on the gold loan segment, which accounts for 37 per cent of its loan book, will continue for two more quarters.
The bank is confident of a pull back on the gold loans business once the overall economy improves, he said, adding that provisions done during the quarter will come back once the recoveries happen.
The overall provisions shot up to Rs 98.26 crore during the reporting quarter as against Rs 57.53 crore in the year-ago period. The provisions for NPAs and write-offs stood at Rs 104.24 crore as against Rs 13.76 crore.
Rajendran said the bank is giving time to the borrowers and not in a haste to auction the pledged gold for recoveries, saying that such an approach is beneficial for both the lender and also the borrower who accords a sentimental value to the precious metal.
The gross non-performing assets ratio stood at 4.88 per cent as against 3.51 per cent in the year-ago period, but deteriorated sharply when compared with the 2.68 per cent figure in March.
Total income during the first quarter rose to Rs 571.53 crore from Rs 496.88 crore in the year-ago quarter. The bank had reported a total income of Rs 609.45 crore in the January-March quarter of FY21.
The advances growth came at 23 per cent and deposits grew 14 per cent during the quarter when compared to the year-ago period.
Share of the low-cost current and savings account advances improved to 33 per cent from 29 per cent, but the net interest margin declined sharply to 5.17 per cent from March''s 5.42 per cent, possibly because of the high instance of NPAs.
The core net interest income came at Rs 268 crore as against Rs 185 crore in June 2020, while the non-interest income grew marginally to Rs 76.28 crore.
The bank is targeting to maintain the credit growth at 20-25 per cent levels despite the COVID impact, Rajendran said, pointing to gold, corporate, retail products and small businesses as the focus areas.
It is re-entering some businesses like loan against property, personal loans and education loans, and also enter newer segments like healthcare finance, construction equipment and commercial vehicles, its president Pralay Mondal said.
The lender is in final stages of tying up with HDFC to distribute the mortgage major''s premium loans, and is also looking at introducing a co-branded credit card with a fintech firm, he added.
Rajendran said it will double the number of new branch openings to 200 in FY22, and focus on southern states and also west and north.
Its overall capital adequacy stood at a healthy 21.63 per cent and Rajendran said there will be no need for fresh money till 2023 at least.
The bank scrip shed 3.52 per cent to close at Rs 323.25 apiece on the BSE on Thursday as against gains of 1.22 per cent on the benchmark. PTI AA