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HDFC Securities Retail Research
CSB Bank is a century old private sector bank in India having a strong base in Southern India. After being taken over by new promoters (Toronto-based Fairfax group) in October 2018, the real transformation had started.
Changes like creating new brand image, funding the capital for growth, strengthening top management by bringing in new experienced people, product-based lending approach etc. were implemented. And now after achieving critical transformation, the bank has continued its focus on growth.
Aggressive branch expansion, digitisation and technology on boarding, improving current account and savings account ratio to lower cost of funds, strengthening retail segment by launching new product suite are a few key focused areas. The new management has lied down a growth plan – Sustain, Build, Scale 2030 i.e., SBS 2030, according to which there will be healthy growth over three years and it will further accelerate thereafter.
CSB Bank is well capitalised to fund growth without having to raising capital at least in next one year. Over dependence on gold loans and South India being a key market place brings concentration risk.
The bank has opened 100 branches each in three consecutive financial years (FY21, FY22 and FY23).
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