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Dolat Capital Report
CSB Bank reported healthy net interest income growth (up 16% YoY) and better than expected operating profits, led by robust treasury management and lower opex.
Slippages at 0.9% remained very benign, aiding profit after tax growth by 88% YoY, with reported return on asset at 1.75%. Core pre-provision operating profit/assets was stable QoQ at 2.3% despite lack of private sector lending certificates gains during the quarter.
Gross non-performing assets were stable QoQ at ~1.8%. CSB Bank made accelerated provisions towards NPAs, raising its provision coverage ratio by 400 basis points QoQ to 67% and continues to hold standard loan buffers at ~0.7% of advances.
We build in credit costs of ~55 bps for FY23/24E, but if current trends sustain, credit costs could be far lower.
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