Thrissur-headquartered CSB Bank aims to lower the share of gold loan segment in its overall advances portfolio to 30% by FY30, as against 46% as of June-end, the bank’s MD & CEO Pralay Mondal told fe.
“Till FY25, our gold loan segment will continue to have a large share and then gradually other businesses will start taking off and gold business will taper off,” the MD said.
Gold loans, by 2030, will constitute 30% of overall advances, he said, while retail loans will be at 30%, small and medium enterprises (SME) will account for 20% and wholesale and securitisation portfolio will be 20% of overall advances, the MD said.
As of June 30, CSB Bank’s net advances stood at Rs 21,103.55 crore, up 31% on a year-on-year basis. Gold loans constituted 46% of the overall advances, corporate loans accounted for 28%, retail loans comprised 14% while SME loans accounted for 12% of overall advances. Further, the bank aims to launch other loan products such as loans against property, home loans, commercial vehicles and commercial equipments loans and auto loans going ahead, the MD said.
On liabilities side, the bank aims to sustain the deposit growth at Q1FY24 level. As of June-end, the private lender’s deposits rose 21% YoY to Rs 24,475.5 crore. While deposits grew in double-digits, the share of low-cost current account and savings account (CASA) fell to 30.84% as of June 30 from 35.14% a year ago.
“…CASA growth unless you have full service and product franchise, growing CASA franchise is not that easy and that is why I have guided that we will remain between 30%-32%…eventually we will move towards 40% by FY30,” the MD said.
When asked about how the bank plans to tackle credit-deposit (CD) ratio reaching about 90%, the MD said the bank is “quite comfortable” with the current levels and that the CD ratio across industry has risen due to faster credit growth.
“We are quite comfortable with CD ratio between 85%-90%…in this cycle a lot of banks’ CD ratio has gone up, and eventually when liquidity sustains over a period of time and the deposit growth starts picking up in the system, the CD ratio will also start coming down gradually,” the MD said.
Lastly, the MD said he expects some moderation in net interest margin (NIM) in Q2FY24 due to deposit repricing. “I think now the deposit repricing will play out next quarter and after that it will flatten out. I think we have one more quarter to watch on NIM and Q3 onwards I think it will be business as usual…and stabilise at that level,” the MD said. CSB Bank on Thursday posted 15% YoY rise in its net profit for the quarter ended June at Rs 132.2 crore.