CSB Bank Q4 Review - Asset Quality Trends Improve; One-Time Operating Expense Hurt Profit: Dolat Capital
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Dolat Capital Report
CSB Bank Ltd. reported a good set of numbers with further improvement in net interest margin to 5.4%, sharp sequential improvement in pro forma gross non performing asset (down 70 basis points), healthy loan growth (9% QoQ) and good traction in low cost liabilities (34% YoY current account and savings account growth).
However, one-time actuarial impact of revision in mortality assumptions (Rs 381 million) resulted in higher operating expenses and weaker pro-provision operating profit/profit after tax versus estimates.
Covid-19 related stress seemed limited with slippages at ~1.7% in FY21, in line with FY20 and amongst the best in industry.
Moreover, ~20-25% of these are from gold segment.
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