KOCHI: Will this be the last bad news for Catholic Syrian Bank (CSB) that the bank has reported a loss of Rs94.47 crore for the financial year closing March 31, 2018?
The shareholders of the bank can certainly be relieved so, as the fabled international investor – Fairfax Holdings is all set to bring in Rs1200 crore for owning 51 per cent stake in the bank, which was facilitated by Reserve Bank’s unprecedented decision to allow an outside investor to buy majority stake in a bank in the country.
Networth, assets drop
Fairfax though is understood to be enjoying far less the voting rights compared with the equity stake of 51 per cent offered to it – once the deal is closed, is likely to have a big say in the running of the bank as the funds the group is bringing is about 1.5 times larger than the current networth of the bank, which is Rs889 crore, down from Rs1000 crore a year back. The asset base of the bank also has shrunk marginally during the current year.
Interestingly, a tax appropriation of Rs51.90 crore has softened the impact of the original loss this time for CSB because the bank’s loss before tax was Rs149.36 crore compared with Rs8.91 crore for the same period last year.
While the capital adequacy ratio (CAR) as of the year end was 9.91 per cent, which will certainly be repaired with the new funding from Fairfax, the gross NPA has grown up to 7.89 per cent from 7.25 per cent and the net NPA has marginally fallen from 5.51 per cent to 4.46 per cent as of March 31, 2018.
While the interest income of the bank dropped from Rs1336.30 crore to Rs1296.81 crore during the current year, the income from investments also witnessed a modest fall from Rs412.56 crore to Rs336.20 crore during the period under review.
However, the bank made an operating profit (before provisions) of Rs74.32 crore during the current year against Rs151.71 crore for the comparable period last year. But, the provisions valued at Rs223.69 crore broke the back of the bank, out of which provisions against non-performing assets (NPA) were to the tune of a whopping Rs191.07 crore.