Hi Ayush. CSB bank loan book is highly focussed on Gold loans with same accounting for more than 45% of total loan book. Other part is Corporate + SME. Bank has very low penetration in scalable retail business such as Home loans, PL, VL etc. NIMs will go down in more secured retail. At present, loan book is quite small and Gold loans at 11% is not that scalable since SBI & other PSUs are aggresively going in retail segment. As per my understanding, Bank needs to have a niche growth strategy which is missing plus bank has only regional presence in South. PE of the bank is cheap for a reason. Even Cost income ratio shall be elevated since the bank is in building phase.
I track the BFSE sector closely. Equitas/Ujjivan/IDFCFirst can be better picks since they have setup a niche asset segments and are scaling up now.
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