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ICICI Direct Report
CSB Bank posted flat QoQ earnings growth; asset quality improved.
Net interest income up 14.7% YoY, -0.4% QoQ, net interest margin fell 42 bps at 5.4%, yields at 11.2%.
Cost to income at 57% QoQ while provision witnessed a reversal. Profit after tax reported growth of 19.6% YoY, flat on QoQ basis.
Gross non-performing asset down 19 basis points QoQ to 1.26%, net non performing asset down 7 bps QoQ to 0.35%.
Key triggers for future price performance:
Majority of capex will be done in the next couple of quarters, which will keep opex elevated though the benefit to accrue gradually.
Expansion outside the southern region will bring diversification and target of 100 branch addition in FY24 will aid current account and savings account growt.
Guidance of higher than industry credit growth with sustainable margins (at ~5% levels) and lower credit cost to keep return on asset steady.
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