As part of its strategy to become a pan India franchise, Kerala-based CSB Bank is planning to add close to 200 branches to its network in FY22 even as it has posted an all-time high net profit in its 101st year of existence.

The branch expansion will mostly be in newer markets outside Kerala, including states like Andhra Pradesh, Telengana, Maharashtra, Tamil Nadu and Goa.

Despite the Covid-19 pandemic, CSB Bank reported a record net profit of Rs 218.40 crore for the fiscal ended 31 March 2021 compared to Rs 12.72 crore a year ago.

“We could open 101 branches in this 101st year of existence. In terms of profitability, we could break all the past records by crossing the Rs 200 crore mark," said CSB Bank managing director and CEO C V R Rajendran

The record profit came on the back of a strong growth in net interest income (NII), advances and non-interest income. NII rose 59% to Rs 941.39 crore.

During the quarter ended 31 March 2021, the private lender reversed is losses to report a net profit of Rs 42.89 crore as against a loss of Rs 59.70 crore in the same quarter of the previous fiscal. NII rose 75% to Rs 275.70 crore.

“There was all round improvement in the performance of the bank. NII grew very well. The non-interest income of the bank also contributed to the profit. The advances growth, specially on the gold loans side, was strong,” said Rajendran.

The non-interest income of the bank rose 81% to Rs 400.82 crore for the fiscal. During the March quarter, the non-interest income rose 30% to Rs 112.32 crore. Non-interest income was backed primarily by treasury profits, processing fee, Banca (Bankassurance), selling insurance products commission and PSLC (priority sector lending certificate) income. This is the excess priority sector lending that the bank has undertaken, which can be sold to another bank which has not achieved its target.

Cost income ratio for the full financial year was at 54.31%, substantially improving over the year-ago period when it was 65.53%.

Total income during the fiscal fourth quarter grew to Rs 609.45 crore versus Rs 475.49 crore a year ago. Interest income moved up by 28% to Rs 497 crore.

The full-fiscal income also increased to Rs 2,273.11 crore from Rs 1,731.50 crore in FY20. Interest income during the year was at Rs 1,872 crore as against Rs 1,510 crore.

The bank’s total advances grew 33% to Rs 16,667 crore, led by an over 61% growth in gold loans to Rs 6,131 crore. This comprised 39.8% of the bank’s total advances.

The corporate loans of the bank, which formed the next chunk of advances, grew by 7.4% to Rs 3,653 crore. Unlike other banks, CSB Bank’s retail advances degrew 7.5% to Rs 1201 crore. The two-wheeler loan segment saw a 119.8% jump to Rs 171 crore. Loans to the agriculture sector and microfinance institutions also saw a quantum jump of 253% to Rs 567 crore.

Deposits grew 21% to Rs 19,140 crore as against Rs 15,791 crore a year ago. The low-cost current account savings account (CASA) also showed an improvement to 32.19 % of total deposits at the end of the fourth quarter ended March 2021. In the year-ago period, CASA was 29.17% of the total deposits.

Gross non-performing assets (NPA) decreased by Rs 15.94 crore to Rs 393.49 crore. The gross NPA as percentage of advances fell 86 basis points to 2.68% as of 31 March 2021 as against 3.54% a year ago.

Net NPAs also fell to 1.17% (Rs 168.81 crore) from 1.91% (Rs 216.94 crore).

Provision coverage improved to 84.89% at the end of the quarter from 80.02% a year ago. In addition to this, the bank is also holding a standard asset provision of Rs 168.21 crore.

"While the industry grew by approx 12% in deposits and 6% in advances, we could outperform by recording 21% and 27% growth in deposits and advances, respectively. In terms of overall business, the bank has grown a fourth," said Rajendran.

He said gold loans, two-wheeler loans, agri loans, MSME and SME loans will continue to be the main focus areas of the bank.