Update On CSB Bank Buy Motilal Oswal
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Business trends remain weak due to a decline in Gold loans; CASA growth moderates
CSB BANK released its quarterly business update highlighting trends for 2QFY22.
Here are the key highlights:
* CSBBANK reported weak business trends, with gross advances up 1.7% QoQ (~12% YoY), lower than some of its peers such as FB (+3.4% QoQ) due to a decline of ~3% QoQ in its Gold loan portfolio. Growth in gross advances (excluding Gold loans) was robust (5% QoQ/13.3% YoY). The share of Gold loans in the total mix declined by ~190bp QoQ to ~38%.
* Deposits grew 9% YoY (~2% QoQ), CASA up 0.7% QoQ (21% YoY), and term deposits grew 3% QoQ (~4% YoY). CASA ratio declined by ~50bp QoQ to ~32.6%.
* CSBBANK reported weak business trends on both the loan and deposit front. Disbursements in the Gold loans portfolio remain weak, with a sharp recovery in loans, excluding Gold. Some of its peers such as FB have reported a much stronger business performance.
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