CSB Bank expects to grow by 20-22% in the current financial year despite a slowdown in growth in the gold loan business.
In the next fiscal, the bank expects to grow by 25% both in advances and liabilities, with its new team of officials becoming functional by April 2021 ,MD and CEO CVR Rajendran said.
“We are seeing good enquires from the SME and mid-size corporates. Retail demand is also back.Demand is good in the agro-processing and auto ancillary sector,” he added.
Total advances grew 21.6% year-on-year (y-o-y) to Rs 13,137.3 crore during the third quarter, with the gold loan portfolio growing by almost 60.7 % y-o-y to `5,644 crore. Sequentially, the gold loan portfolio grew only 14 % .
“Gold loan has tapered down during Q3 .Gold prices have become volatile and have also fallen. We have gradually reduced the LTV from 82 %. Our average LTV for the current portfolio would be 70-75%,” he added.
The Thrissur-based lender reported a 89 % y-o-y increase in its third quarter net profit to Rs 53.05 crore on higher interest and treasury income.
Regarding the NIM, Rajendran said that NIM of 5.17 % cannot be maintained for long as there is pricing challenges in most sectors. He added that the ideal NIM for the bank would be above 4 % in the long-run. “COVID has not had the impact which we had anticipated. We have build up a huge reserve for it. Provision Coverage Ratio is 91% and apart from it there is standard provisioning don’t think so much will be required and we will slowly unwind going forward,” he said.
“Accounts which would have been classified as NPA but for Supreme Court embargo,excluding restructured, totalled Rs 195 crore. We are maintaining 25% provision on these accounts. Out of Rs 195 crore, Rs 130 crore or 70% are gold loan accounts which we expect to recover without any hitches or glitches,’ he added.
On the VRS scheme the bank introduced last quarter, he said that only 33 employees of the 223 who are eligible have opted for it.
He added that the bank has opened 60 branches in the current fiscal from the planned 100 branches .
