We will achieve this by implementing best in class technology, leveraging loyal partnerships, offering all products and services across our business verticals and creating a customer focus mindset among our employees to deliver best in class products and services.

How we Performed

Our Bank has progressed on all performance parameters over the past few years. Our initiatives in creating efficiencies, building robust risk management practices and expanding distribution are delivering the desired outcomes to our stakeholders.

After COVID lockdowns and resultant slowdowns in FY21, there has been a widespread rebound in the economies across the globe. Vaccination and other measures have helped this recovery.

Nevertheless, COVID 19, with its new variants, remains an unmitigated risk to the wellbeing of people and health of economies. Despite the impact of continued challenges triggered by COVID-19, the Bank performed exceedingly well in FY22.

As an outcome of our operational efficiency, margins and key ratios showed year-on-year progress across Key Performance Indicators(KPI). Operating Profit this FY is at INR 614 crore as against INR 516 Crore in the previous financial year, up by 19% YoY. Profit after Tax has increased to INR 459 Crore from INR 218 Crore in the previous year, up by 110% YoY. The yield on advances increased to 11.21% up by 24 bps. As on 31.03.2022, the cost of deposits is at 4.31%, down by 76 bps YoY. Return on Assets and Return on Equity improved to 1.91% and 21.28% which is up by 92 bps and 875 bps, respectively. Earnings per Share improved to INR 26.4 YoY (111%) from INR 12.6 and book value per share to INR 144 (up by 23%) from INR 117.

Net Interest Income is at INR 1,153 crores, which grew by 23% in FY22. Net Interest Margin improved to an all-time high of 5.27% and is up by 46 bps. Non-interest income is at INR 247 crore which is down by 19%, primarily on account of lower treasury income. However, Ex-treasury profits, and Core Non- Interest Income grew by 17%.

Backed by our expansion of operational capabilities, gross advances and deposits registered year-on-year improvement. In line with our branch expansion plan, we have opened 100 new branches during the financial year, taking the total branch count to 603 as on March 31, 2022. Of the new branches opened so far in 2022, many are in the Northern and Western States and we will be further opening more branches there, thus expanding our Pan India presence.

Our total deposits stood at INR 20,188 crore with an increase of 5.5% YoY and CASA book is at INR 6,795 Crores, up by 10.2%. Our net advances increased by 9.53% to INR 15,815 crores.

The Bank continues to improve its asset quality. Gross NPA percentage has improved by 87 bps to 1.81% during the financial year. The Net NPA percentage of 0.68% has improved by 49 bps over the previous FY. PCR stood at around 90%. We are holding a standard asset provision of INR 107 Crores as on 31.03.2022 over and above RBI requirements and if we consider this, PCR is close to 100%.

Prevailing economic backdrop

Russia – Ukraine conflict that started in February 2022 has severely impacted crude oil prices and has triggered inflation. US sanctions on Russia and lockdowns in major cities in China have added to the woes of scarcity of food grains, raw materials and finished goods. US FED, Reserve Bank of India and other central banks have resorted to raising policy interest rates to contain inflation.

India’s economy would continue to be impacted by global volatility and uncertainties. Factors like the geopolitical tension, pace of monetary tightening by central banks and the overall global economic slowdown will have a bearing on India’s economy too. The inflationary trends and consequent rate hikes may lead to compression in spreads if Banks are not able to pass on the increase in the cost of funds to the borrowers given the competitive scenario in the banking ecosystem.

Looking Ahead

Your Bank against the backdrop of challenging economic conditions would focus on sustaining its ongoing pursuit of excellence and growth. While preparing to embrace more stringent capital adequacy norms applicable in Basel IV, the key drivers as envisaged in our mission-SBS 2030 encompasses the expansion of our branch networks across India, driving growth through business verticals-both existing and new, enhancing business per branch leveraging fixed costs, digitalisation and technology. We are committed to give a transformed experience to our customers by ensuring that design thinking is well entrenched in the organisation.

CSB Bank through “SBS 2030” will have an enhanced focus on Environment, Social and Governance (ESG) for value creation across our stakeholders. Operations sticking to ESG parameters facilitate top-line growth, reduce costs, improve certifications from regulators, minimise legal complications and help in reduction of carbon footprint. Superior ESG execution can provide access to new markets, which ultimately accelerates the momentum for inclusive growth.

I assure all our stakeholders that CSB Bank is certainly emerging as a significant player in India’s banking sector. We will continue to scale up the business by sustaining and building our turnaround strategies. I take this opportunity to place my gratitude to all our customers and shareholders and thank the Board for guiding the Bank to our Vision of SBS 2030. I also thank each CSBian for their commitment to our customers as we embark on this journey to grow and scale your Bank in this decade and beyond.

Warm Regards,

Pralay Mondal

Managing Director & CEO (Interim)