While continuing to bank on gold loans as primary growth driver, the bank is set to target opportunities in the SME, two wheeler and secured loan segments.
Retail head Mondal told ET in an interview that the bank is targeting to grow at 25-30% in the next few years to ramp up its assets and liabilities base.
“Gold loan is a high yielding business; so we will continue to focus on that segment along with strong push on SME loans, especially because of the Covid emergency guarantee loan scheme, two wheeler loans, education loans, loans against property, small business loans and some aspect of agriculture loans,” said Mondal, President – Retail, SME, Operations & IT, CSB Bank. “We also don’t have plans to offer higher rates of interest to attract deposits. I rather focus on getting a strong customer franchise with sticky customers.”
Mondal added that the private lender was targeting a loan mix of 70-30%, where 70% would be retail and SME loans while the remaining would be wholesale assets.
The lender wants to build a strong customer franchise and expand in markets such as Kerala, Tamil Nadu, Karnataka and Andhra Pradesh, Western India, Punjab and Rajasthan. Presently, half of its 454 branches are in Kerala.
“The idea is to build an asset base in the southern and western markets and a liability franchise in the northern markets. We will slowly expand the asset base in north India,” Mondal added.
The Thrissur-based lender saw a 60% rise in its gold loan portfolio which stood at Rs 5644 crore, followed by a 6% growth in SME loans which ended the December quarter at Rs 2131 crore. Corporate loans were flat on a year-on-year basis at Rs 3208 crore. The lender also reported stable asset quality metrics with gross bad loan ratio at 1.77% at the end of December quarter versus 3.22% a year ago.
CSB Bank has also strengthened its leadership team at its risk, technology, retail distribution, SME, NRI and digital business verticals.
Watsa’s Fairfax Holdings holds a majority 50% in the lender.