CSB Bank Limited held its 104th Annual General Meeting (AGM) on August 26, 2025, where shareholders approved all nine resolutions put forth by the bank's management. The meeting, conducted through video conferencing, saw participation from 64 shareholders, including one from the promoter group and 63 public shareholders.

Key Approvals

Shareholders gave their nod to several important resolutions, including:

1. Adoption of audited financial statements for the year ended March 31, 2025
2. Re-appointment of Madhavan Menon as director
3. Fixation of joint statutory auditors' remuneration
4. Appointment of BNP & Associates as secretarial auditors
5. Appointment of Biswamohan Mahapatra as Non-Executive Part-time Chairman
6. Re-appointment of Pralay Mondal as Managing Director & CEO for three years from September 15, 2025, to September 14, 2028

Material Related Party Transactions

The AGM also saw approval for continuing material related party transactions with FIH Mauritius Investments Ltd, the bank's promoter, and its subsidiary FIH Private Investments Ltd.

Voting Results

All resolutions passed with overwhelming majority support:

Regulatory Compliance

It's worth noting that despite FIH Mauritius Investments Ltd holding 40% of the bank's paid-up capital, their voting rights are capped at 26% in accordance with banking regulations. This cap is in line with Section 12(2) of the Banking Regulation Act, 1949, and the Reserve Bank of India's guidelines on acquisition and holding of shares in banking companies.

The AGM proceedings and voting were conducted in compliance with the Companies Act, 2013, and the regulations set by the Securities and Exchange Board of India (SEBI). CS P.D. Vincent of SVJS & Associates served as the scrutinizer for the e-voting process.

CSB Bank's leadership, including Chairman Biswamohan Mahapatra and MD & CEO Pralay Mondal, addressed the shareholders during the meeting, likely discussing the bank's performance and future strategies. The approval of all resolutions indicates strong shareholder confidence in the bank's management and its strategic direction.

CSB Bank , the Kerala-based private lender, saw its shares plummet 18% over three consecutive trading sessions following the release of its first-quarter results. The stock fell 8% on Thursday alone, reflecting investors' concerns about the bank's performance.

Quarterly Performance

The bank reported modest growth in key financial metrics for Q1:

• Net Interest Income (NII) grew by 5% year-over-year to ₹379.00 crore
• Net profit increased by 5% to ₹119.00 crore
• Non-Interest Income surged by 42% to ₹245.00 crore

However, the results fell short of market expectations, particularly in terms of asset quality and margins.

Asset Quality Concerns

CSB Bank's asset quality showed signs of deterioration:

• Gross Non-Performing Assets (GNPA) ratio rose to 1.84% from 1.69% in the same quarter last year
• Net Non-Performing Assets (NNPA) ratio slightly decreased to 0.66% from 0.68% year-over-year

Margin Pressure

The bank experienced significant pressure on its margins:

• Net Interest Margin (NIM) dropped by 82 basis points year-over-year to 3.54%
• MD & CEO Pralay Mondal expects margins to remain between 3.5-4%

Mondal attributed the decline in margins to higher-cost deposits, indicating potential challenges in the bank's funding mix.

Market Reaction

The disappointing results led to a sharp sell-off in CSB Bank shares:

• The stock price fell to ₹360.00, down from its 52-week high of ₹445.60 reached on August 5
• Trading volumes surged, with 9 lakh shares traded in the first hour on Thursday, compared to the 20-day average of 70,000 shares

Analyst Downgrade

In response to the bank's performance, Dolat Capital downgraded CSB Bank:

• Rating changed from 'buy' to 'reduce'
• Price target cut from ₹450.00 to ₹390.00

Management's Perspective

Despite the challenges, CSB Bank's management highlighted some positive aspects:

• Cost Income Ratio improved to 65% for Q1 from 68% in the same quarter last year
• Operating Profit increased by 28% year-over-year to ₹220.00 crore
• The bank maintained a robust Capital Adequacy Ratio of 21.71%

Pralay Mondal, MD & CEO, stated, "Q1 is incredibly special for us as it marked a pivotal milestone of our successful CBS migration along with the roll out of fifty plus surround systems, thus enhancing our capabilities manifold and taking us very close to the launch of Scale Phase in our SBS 2030 journey."

He added, "Though the elevated costs primarily driven by technology implementation and slightly higher slippages put some pressure on the bottom line, the profitability, efficiency, liquidity, and capital adequacy ratios continue to be stable."

As CSB Bank navigates through these challenges, investors will be closely watching how the bank manages its asset quality and improves its margins in the coming quarters.