|
% Shareholding
|
Pre IPO
|
|
Promoter
|
50.09
|
|
Public
|
49.91
|
Company Background
CSB Bank Ltd (Formerly known as The Catholic Syrian Bank Limited) offer a wide range of products and services to its overall customer base of 1.3 million (as on September 30, 2019), focusing particularly on SME, Retail, and NRI customers. They have four principal business areas, viz., (a) SME banking, (b) retail banking, (c) wholesale banking, and (d) treasury operations. The bank delivers its products and services through multiple channels, including 412 branches (excluding three service branches and three asset recovery branches) and 290 ATMs spread across 16 States and four Union Territories as on September 30, 2019. The bank’s advances were Rs11,298cr for the six-month period ended September 30, 2019. Its overall deposits were Rs15,510cr for the six-month period ended September 30, 2019. Its CASA deposits were Rs4,372cr as on September 30, 2019 and its CASA ratio was 28.19% for the six-month period ended September 30, 2019.
Object of the Offer
The Offer comprises of the Fresh Issue and the Offer for Sale. The objects of the Offer are to achieve the benefits of listing the Equity Shares on the Stock Exchanges and for the Offer for Sale. The objects of the Fresh Issue are to augment Bank’s Tier-I capital base to meet its future capital requirements which are expected to arise out of growth in bank’s assets, primarily loans/advances and investment portfolio and to ensure compliance with Basel III and other RBI guidelines.
Financials
|
Figures Rscr
|
FY17
|
FY18
|
FY19
|
H1FY20
|
|
Total Income
|
1,617
|
1,422
|
1,483
|
817
|
|
PBT
|
(100.4)
|
(194.9)
|
(97.6)
|
68.9
|
|
PAT
|
(58.0)
|
(127.1)
|
(65.7)
|
44.3
|
|
Basic EPS (Rs)
|
(7.7)
|
(15.7)
|
(7.9)
|
3.9
|
|
RoNW (%)
|
(10.6)
|
(35.9)
|
(6.7)
|
2.9
|
|
Net Asset value per equity share (Rs)
|
67.5
|
43.7
|
73.5
|
89.2
|
Source: RHP
For additional information and risk factors please refer to the Red Herring Prospectus. Please note that this document is for information purpose only
Key Points
CSB Bank provide its products and services primarily through an extensive physical network of branches and ATMs. They operate in 16 States and four Union Territories in India, reaching 1.3 million customers through 412 branches (excluding three service branches and three asset recovery branches) and 290 ATMs, as on September 30, 2019. With over 98 years of history, the bank believes that it has developed a well-recognized and trusted brand in south India, particularly in the states of Kerala and Tamil Nadu, where it has built strong relationships with its customers, which has been one of the key growth drivers. The bank is known for its consistent approach in developing long-term relationships with its customers, based on its local knowledge and experience, amongst other things. The bank’s strong gold loan portfolio is a testimonial to the trust placed in the brand by its customers. Its deposit renewal rate has increased from 88.01% as of March 31, 2017 to 93% as of March 31, 2018 and to 97.24% as of March 31, 2019. Further, its deposit renewal rate was 97.86% as on September 30, 2019.
The bank’s capital position has been significantly strengthened post FIHM’s investment in the Bank. Pursuant to a preferential allotment of equity shares and warrants to FIHM, for which the bank has received Rs721cr in Fiscal 2019 and the balance amount of Rs487cr in Fiscal 2020, CSB Bank has a strong capital base for growth acceleration, something which the bank was not able to accomplish in past due to paucity of capital. As per the Basel III Norms, the CRAR, as assessed by the bank as on March 31, 2019 and September 30, 2019, was 16.70% and 22.77% (including capital conservation buffer), respectively. As on March 31, 2019 and September 30, 2019, the bank’s Tier 2 CRAR stood at 0.67% and 0.66%, respectively and therefore the bank has significant head room available to raise Tier 2 capital to supplement its strong Tier 1 capital base.
Key Risk
If the bank is unsuccessful in controlling or reducing its impaired loans, or if there is a significant increase in impaired loans or deterioration in the quality of the assets that the bank holds as security, the bank’s future financial performance could be materially and adversely affected.
The bank has regional concentration in southern India, especially Kerala. Any adverse change in the economic, political, or geographical conditions of Kerala and other states in southern India can impact its results of operations.
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