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Will consider inorganic opportunities once Covid is behind us: CSB Bank CEO


MUMBAI: Canadian billionaire Prem Watsa promoted CSB Bank (erstwhile Catholic Syrian Bank) which was considering merger opportunities with old generation private sector banks, feels it will only reconsider the plans once the impact of the pandemic is over. The chief of the Thrissur-based lender said the pandemic had blurred real valuations of some of these target banks.

“It is an expression of interest, we have said that we are open to inorganic growth but now with the pandemic the situation has become quite fluid and we don’t understand the balance sheets now. Let the Covid problem be over then we will know the revalue of these banks,” said CV Rajendran, MD, CSB Bank.

Rajendran also said that the lender will only consider a very small portion of its loans for one-time restructuring.

“Restructuring will be a minuscule portion of our portfolio, we have given other reliefs to our customers like the Covid Emergency Loans which is to be paid across 35 months and moratorium where dues can be paid till March,” he said. “In instances where large corporate cases go for restructuring our exposure is insignificant.”

18% of the bank’s book is under moratorium till August end that accounts to loans worth Rs 2228 crore while it’s collection rate for moratorium accounts is 47%.

The Reserve Bank of India recently allowed banks to restructure those corporate and retail loans which have been affected due to the pandemic.

The bank which also saw a dip in its retail lending portfolio hopes to restart that business in the September quarter when veteran banker Pralay Mondal joins as President and head of retail segment. The bank saw a 13% drop in retail loans and 19% fall in MSME loans.

Rajendran said that the bank would aggressively grow the gold loan portfolio after the RBI increased loan-to-value on such loans to 90%. Gold loans grew nearly 28% in the June quarter over last year.

“We don’t see any trouble in gold loans, RBI has now created a level playing field among banks and NBFCs in that segment,” he said. “We have been in this business for 100 years, we saw a fall in gold loan prices of nearly 30% in 2014 but on a Rs 3000 crore we lost only Rs 60 lakhs.”

The bank reported its highest ever quarterly profit at Rs 54 crore for the quarter ended June. It had reported profit of Rs 20 crores in the same period last year. The bank also saw its net non performing loan ratio ease to 1.74% from 2.04% same time last year. It’s provision coverage ratio was improved to 81.7%.


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