CSB BANK 2023-24 Annual Report Analysis

Fri, 2 Aug

CSB BANK has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the bank during the year 2023-24.

CSB BANK Income Statement Analysis

• Interest income during the year rose 26.2% on a year-on-year (YoY) basis.
• Interest expenses were up by 47.2% YoY during the same period.
• Operating expenses increased by 35.9% YoY during the year.
• The bank's net interest income (NII) increased by 10.7% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a decline and stood at 4.6% in FY24 as against 5.0% in FY23.
• Other income increased by 84.9% YoY during the year.
• Net profit for the year increased by 3.6% YoY.
• Net profit margins during the year declined to 19.4% in FY24 from 23.6% in FY23.

CSB BANK Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	23,197	29,275	26.2%
Other Income	Rs m	3,160	5,843	84.9%
Interest Expense	Rs m	9,858	14,511	47.2%
Net Interest Income	Rs m	13,338	14,764	10.7%
Operating Expense	Rs m	9,425	12,808	35.9%
Pre-provision Operating Profit	Rs m	7,074	7,799	10.3%
Provisions & Contingencies	Rs m	1,600	2,131	33.2%
Profit before tax	Rs m	7,336	7,614	3.8%
Tax	Rs m	1,863	1,946	4.5%
Profit after tax	Rs m	5,474	5,668	3.6%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	5.0	4.6
Net profit margin	%	23.6	19.4

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CSB BANK Balance Sheet Analysis

• The bank's deposits during FY24 stood at Rs 297.2 bn as compared to Rs 245.1 bn in FY23, thereby witnessing an increase of 21.3%.
• Advances for the year stood at Rs 243.4 bn as compared to Rs 206.5 bn during FY23, a rise of 17.8%.
• Cost of deposits for CSB BANK rose 21.3% and stood at 4.5%, while yield on advances rose to 10.1%.
• The lender's investments rose to Rs 75.5 bn during the year from Rs 58.5 bn in FY23.
• Borrowing stood at Rs 17.6 bn, a growth of 124.5% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 360.6 bn as against Rs 291.6 bn during FY23, thereby witnessing a rise of 23.6%.

CSB BANK Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	31,853	37,864	18.9%
Advances	Rs m	206,506	243,356	17.8%
Deposits	Rs m	245,058	297,188	21.3%
Yield on advances	%	9.1	10.1
Cost of Deposits	%	3.7	4.5
Investments	Rs m	58,487	75,514	29.1%
Borrowings	Rs m	7,830	17,574	124.5%
Total Assets	Rs m	291,623	360,560	23.6%

Current Valuations for CSB BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 32.7, an improvement from the EPS of Rs 31.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 337.5, stands at 10.3 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.5 times, while the price to income ratio stands at 2.0 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	133.7	168.7
Earnings per share (Unadj.)	Rs	31.6	32.7
Diluted earnings per share	Rs	31.6	32.7
Avg P/E ratio	Rs	7.2	10.3
Avg P/ABV ratio	Rs	1.6	1.5
Avg Market Cap	Rs	39,295	58,287
Dividends per share (Unadj.)	Rs	0.00	0.00

Ratio Analysis for CSB BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio deteriorated and stood at 81.9x during FY24, from 84.3x during FY23. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio increased and stood at 8.31x during FY24, from 7.94x during FY23. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): CSB BANK's capital adequacy ratio (CAR) was at 24.5% as on 31 March 2024 as compared to 27.1% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank deteriorated and stood at 15.0% during FY24, from 17.2% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank deteriorated and stood at 1.57% during FY24, from 1.88% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank deteriorated and stood at 18.08% during FY24, from 18.56% during FY23. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. CSB BANK's gross NPA ratio stood at 1.5% as of 31 March 2024 compared to 1.3% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of CSB BANK was 0.5% in financial year 2024. This compared with 0.4% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	84.3	81.9
Debt to Equity Ratio	x	7.9	8.3
Loans / Deposits	x	0.0	0.1
Capital Adequacy Ratio	%	27.1	24.5
Return on Equity	%	17.2	15.0
Return on Assets	%	1.9	1.6
Return on Capital Employed	%	18.6	18.1
% of Gross NPAs	%	1.3	1.5
% of Net NPAs	%	0.4	0.5
Yield on Advances	x	9.1	10.1
Yield on Investments	x	7.2	6.2

To see how CSB BANK has performed over the last 5 years, please visit here.

CSB BANK Share Price Performance

Over the last one year, CSB BANK share price has moved up from Rs 290.6 to Rs 337.5, registering a gain of Rs 47.0 or around 16.2%.

Meanwhile, the S&P BSE BANKEX is trading at 58,352.9 (down 0.8%). Over the last one year it has moved up from 50,635.9 to 58,352.9, registering a gain of 7,717.0 points (up 15.2%).

Overall, the S&P BSE SENSEX is down 0.9% over the year.

(To know more, you can check out historical annual results for CSB BANK here and quarterly results for CSB BANK here)