Update On CSB Bank Ltd By Motilal Oswal
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Business trends remain modest; CASA ratio improves
CSBBANK released its quarterly business update highlighting the 3QFY22 trends. Overall, the bank reported modest business trends on both the loan and deposit fronts. The key updates are provided below:
* Gross advances rose 3.8% QoQ (~+12% YoY) to INR148b, lower than some of its peers such as Federal Bank (+4.6% QoQ), due to a muted ~2% QoQ growth (2% YoY decline) in its Gold loan book. Growth in gross advances, excluding Gold loans, was strong at 5% QoQ/21.3% YoY. The share of Gold loans in the total mix declined ~72bp QoQ to 37.4%.
* Deposits grew 7.3% YoY (flat QoQ) to INR191b driven by strong traction in CASA deposits, which rose 6% QoQ (+22% YoY) while term deposits declined 3% QoQ (flat YoY). Consequently, CASA ratio improved ~200bp QoQ to ~34.6%.
* Disbursements in the Gold loans portfolio remained weak, while loans, excluding Gold witnessed a healthy traction. We note that some of its peers, such as Federal Bank, have reported a much stronger business performance.
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