CSB Bank Confident Of Reducing Slippages Amid Pressure In Lending Segments

CSB Bank’s decision to limit its exposure to unsecured loans, personal loans and microfinance has helped it navigate the current pressures in these lending segments, according to Managing Director and Chief Executive Officer Pralay Mondal.

The lender announced its Q2 earnings on Thursday, reporting net non-performing assets of 0.69%, against 0.68% in the preceding three months. The bank’s gross NPA also came flat at 1.68% in Q2, versus 1.69% in the previous quarter.

Commenting on the results, Mondal said that the banking sector is undergoing revaluation in the entire asset quality segment, primarily because of retail loans, microfinance and unsecured loan spaces where some pressure has built up due to the current macroeconomic situation.

“For us, GNPA has remained the same, NNPA is hardly 1 bps up. But the good part is slippages have come down significantly from the last quarter and I think we will continue to reduce that,” the top executive told NDTV Profit.

The credit cost of the bank has also come down reasonably well from last quarter, he noted.

“I also don’t see us going beyond 20 bps in terms of credit cost for the full year. We are clear that credit cost is not a concern for us now,” Mondal said.

The CSB Bank CEO revealed that the lender is working to improve its asset quality.

“I think we are picking up on the NPA as well. I don’t see too much of a revaluation of NPA for us from this point in time,” he said.

Mondal explained how CSB Bank remained largely unaffected by the segmental pressures because of asset quality and related regulations from the Reserve Bank of India.

“Players in the unsecured loans side, MFI (microfinance institution) side and retail are also seeing some sort of pressure. Fortunately, we slowed down on microfinance, personal loans and unsecured loans quite a bit. So that part of the portfolio is picking out in terms of stress,” he said.

Shares of CSB Bank Ltd. on Friday slipped over 5.5% to record an intraday low of Rs 292.05 apiece on the NSE. The stock was trading 4.22% lower at Rs 296.20 per share at 12:30 p.m., against the benchmark Nifty 50's decline of 1.14% at the time.