The stocks of two Kerala-based private banks, CSB Bank and South Indian Bank, surged on Thursday following their good Q3 performance reported on the New Year's Day. CSB Bank continued to post strong loan and deposit growth while business growth slowed for South Indian Bank.
Gross advances of SIB grew to Rs 86,965 crore during the December quarter, recording a 11.94% year-on-year growth, down from 13.07% in the previous quarter. Gross advances refer to the total money the bank has lent to its customers including loans, overdraft and other credit facilities. As with the rest of the banking industry, deposit growth for SIB continued to lag behind advances growth with total deposits growing 6.28% year-on-year to Rs 1,05,378 crores.
CASA ratio declined to 31.16% of total deposits from 31.80% in the previous quarter. CASA ratio is the proportion of a bank’s total deposits that come from current and savings accounts, which are low-cost sources of funds. A higher CASA ratio indicates that the bank has access to cheaper funds, improving its profitability and ability to offer lower interest rates on loans.
While deposit growth slowed, CSB Bank recorded an impressive 22.17% rise in total deposits, reaching ₹33,406 crore in the December quarter. CASA deposits grew 6.6% to Rs 8,041 crore while term deposits grew 28.1% to Rs 25,365 crore. CASA ratio dropped to 24.08% during the quarter from 24.10% in the previous quarter and 27.59% in the year ago period.
Gross advances of CSB Bank grew 26.45% to Rs 28,914 during the December quarter while gold loans grew 36.28%. Gold loans remain a significant part of CSB’s loan portfolio, accounting for over 45% of gross advances.
Shares of South Indian Bank opened trading at Rs 25.27 but ended the day at Rs 25.98, up 3.3% buoyed by overall market sentiment. The market capitalisation of South Indian Bank stood at Rs 6,792 crore. Shares of CSB Bank touched a high of ₹334.90 during intraday trade but pared some gains to close at ₹322.50, up 2.71%. The market cap of CSB Bank is Rs 5,598 crore.