Update on CSB Bank Ltd By Motilal Oswal Financial Services
Loan growth healthy; CASA ratio moderates sequentially
CSBBANK released its quarterly business update highlighting the 2QFY23 trends. It reported a healthy loan growth while deposit growth was relatively modest. Below are the key takeaways:
* Gross advances grew strongly at 23.6% YoY and 8.1% QoQ to INR176.6b, led by a strong growth in Gold loans, which rose 47.5% YoY and 13.1% QoQ. Growth in gross advances, excluding Gold loans, was modest at 8.9% YoY (4.3% QoQ). The share of Gold loans in the total mix thus increased 200bp QoQ to 45.5%.
* Deposits grew at a modest 10.1% YoY (+3.6% QoQ) to INR209.9b driven by term deposits, which rose 7.4% YoY (+4.9 QoQ). However, growth in CASA deposits was modest at 15.9% YoY (+1% QoQ). Consequently, the CASA ratio moderated 87bp QoQ to 34.3%.
* Disbursement in the Gold loans portfolio continued to remain strong, which supported the overall loan growth, while other segments reported modest trends. Growth in deposits was modest adversely impacted by slightly weak trends in garnering CASA deposits.
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