Update CSB Bank Ltd By Motilal Oswal
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Loan growth steady; CASA ratio improves sequentially
CSBBANK released its quarterly business update highlighting 1QFY23 trends. It reported a steady loan growth while deposit growth came in relatively modest. Below are the key takeaways:
* Gross advances grew 16.2% YoY and 2.1% QoQ to INR163.3b, led by a strong growth in gold loans, which grew 26.4% YoY and 8.2% QoQ. Growth in gross advances, excluding gold loans, was modest at 9.4% YoY (-2.1% QoQ). The share of gold loans in the total mix thus increased 245bp QoQ to 43.5%.
* Deposits grew at modest 8.7% YoY (+0.4% QoQ) to INR202.7b, despite a strong traction in CASA deposits, which grew 15.3% YoY (+4.7% QoQ). Term deposits declined 1.8% QoQ (+5.4 YoY). Consequently, the CASA ratio improved 146bp QoQ to 35.1%.
* Disbursement in the gold loans portfolio continues to remain strong, which supported the overall loan growth, despite a sequential decline in other segments. On the other hand, growth in deposits stood modest.
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