CSB BANK 2022-23 Annual Report Analysis

Tue, 18 Jul

CSB BANK has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the bank during the year 2022-23.

CSB BANK Income Statement Analysis

• Interest income during the year rose 13.8% on a year-on-year (YoY) basis.
• Interest expenses were up by 11.4% YoY during the same period.
• Operating expenses increased by 19.8% YoY during the year.
• The bank's net interest income (NII) increased by 15.7% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a decline and stood at 5.0% in FY23 as against 5.1% in FY22.
• Other income increased by 28.0% YoY during the year.
• Net profit for the year increased by 19.4% YoY.
• Net profit margins during the year increased to 23.6% in FY23 from 22.5% in FY22.

CSB BANK Income Statement – 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Interest Income	Rs m	20,383	23,197	13.8%
Other Income	Rs m	2,468	3,160	28.0%
Interest Expense	Rs m	8,850	9,858	11.4%
Net Interest Income	Rs m	11,533	13,338	15.7%
Operating Expense	Rs m	7,864	9,425	19.8%
Pre-provision Operating Profit	Rs m	6,137	7,074	15.3%
Provisions & Contingencies	Rs m	1,552	1,600	3.1%
Profit before tax	Rs m	6,142	7,336	19.4%
Tax	Rs m	1,557	1,863	19.6%
Profit after tax	Rs m	4,585	5,474	19.4%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	5.1	5.0
Net profit margin	%	22.5	23.6

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CSB BANK Balance Sheet Analysis

• The bank's deposits during FY23 stood at Rs 245.1 bn as compared to Rs 201.9 bn in FY22, thereby witnessing an increase of 21.4%.
• Advances for the year stood at Rs 206.5 bn as compared to Rs 158.1 bn during FY22, a rise of 30.6%.
• Cost of deposits for CSB BANK fell 6.9% and stood at 3.7%, while yield on advances fell to 9.1%.
• The lender's investments fell to Rs 58.5 bn during the year from Rs 70.1 bn in FY22.
• Borrowing stood at Rs 7.8 bn, a fall of 61.0% as compared to previous year.
• Overall, the total assets and liabilities for FY23 stood at Rs 291.6 bn as against Rs 253.6 bn during FY22, thereby witnessing a rise of 15.0%.

CSB BANK Balance Sheet – as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	26,379	31,853	20.7%
Advances	Rs m	158,147	206,506	30.6%
Deposits	Rs m	201,883	245,058	21.4%
Yield on advances	%	10.1	9.1
Cost of Deposits	%	4.0	3.7
Investments	Rs m	70,116	58,487	-16.6%
Borrowings	Rs m	20,072	7,830	-61.0%
Total Assets	Rs m	253,563	291,623	15.0%

Current Valuations for CSB BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 31.6, an improvement from the EPS of Rs 26.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 290.6, stands at 7.2 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.6 times, while the price to income ratio stands at 1.7 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Income per share (Unadj.)	Rs	117.5	133.7
Earnings per share (Unadj.)	Rs	26.4	31.6
Diluted earnings per share	Rs	26.4	31.6
Avg P/E ratio	Rs	10.9	7.2
Avg P/ABV ratio	Rs	1.3	1.6
Avg Market Cap	Rs	49,812	39,295
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 improved and stood at 84.3x during FY23, from 78.3x during FY22. 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 decreased and stood at 7.94x during FY23, from 8.41x during FY22. 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 27.1% as on 31 March 2023 as compared to 25.9% 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 17.2% during FY23, from 17.4% during FY22. 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 improved and stood at 1.88% during FY23, from 1.81% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 18.56% during FY23, from 16.65% during FY22. 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 1.3% as of 31 March 2023 compared to 1.8% 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 0.4% in financial year 2023. This compared with 0.7% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Credit/Deposit Ratio	x	78.3	84.3
Debt to Equity Ratio	x	8.4	7.9
Loans / Deposits	x	0.1	0.0
Capital Adequacy Ratio	%	25.9	27.1
Return on Equity	%	17.4	17.2
Return on Assets	%	1.8	1.9
Return on Capital Employed	%	16.6	18.6
% of Gross NPAs	%	1.8	1.3
% of Net NPAs	%	0.7	0.4
Yield on Advances	x	10.1	9.1
Yield on Investments	x	5.9	7.2

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 202.0 to Rs 290.6, registering a gain of Rs 88.6 or around 43.9%.

Meanwhile, the S&P BSE BANKEX is trading at 51,207.9 (down 0.2%). Over the last one year it has moved up from 40,907.1 to 51,207.9, registering a gain of 10,300.8 points (up 25.2%).

Overall, the S&P BSE SENSEX is up 25.0% over the year.

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