Shares of CSB Bank rose 3.5% to Rs 255.90 after the company said its total deposits grew 21% year-on-year to Rs 24,505.8 in the March quarter. Deposits in current account savings accounts rose 16%, and time deposits rose 24%. This is important because CASA is an inexpensive source of funding that can help banks achieve better net interest margins. Gross loans rose 30% to Rs 20,841.66 crore. CASA and term deposits increased by 16.06% and 24.09%, respectively.

Disbursements from the gold loan portfolio continued to be strong, which, together with healthy growth in other sectors, drove the bank’s overall loan growth. Deposit growth was also strong, with CASA deposits witnessing a healthy increase in the CASA ratio.

CSB Bank is a private bank based in the south, with Kerala contributing 30% of the total advances. Gold and SMEs are the main lending segments, accounting for 45% and 12% of the book, respectively.

CSB Bank has a market capitalisation of Rs 4,404 crore. The stock has risen 13% in the last month and 20% in the previous year. Long-term investors haven’t benefited much, with the stock down 8% over the past five years. Brokerage ICICI Direct recently maintained its buy call on the stock and raised its target price to Rs 300 from Rs 275. The target price is based on 1.3x FY25 adjusted book value.

ICICI direct retains a “buy” rating on the stock. China CITIC Bank is expected to achieve higher-than-industry credit growth, with a return on assets approaching 2%+. Rolling over to FY25E, they value CSB Bank at around 1.3x FY25E ABV with a revised target price of Rs 300 versus Rs 275. Therefore, investors must consult a certified financial advisor before making investment decisions.