Capital Small Finance Bank reported a steady set of financial results for Q4 FY26, with gross advances reaching ₹8,687 crores and total deposits crossing the ₹10,000 crore mark for the first time. The bank, which completed its first decade as a small finance bank, delivered profit after tax of ₹40 crores for the quarter, reflecting 17% year-on-year growth. Management highlighted resilient credit demand across MSME, mortgage, and agriculture segments as key drivers of the quarter's performance.

Key Financial Performance — Q4 FY26 and FY26

The bank's financial metrics for the quarter and full year demonstrated broad-based improvement across income, profitability, and asset quality parameters. The following table summarises the key financial highlights:

Credit Growth and Loan Book Quality

Gross advances stood at ₹8,687 crores as of March 31, 2026, with year-on-year growth of 20.9% and sequential growth of 6.4%. The MSME/business segment was the primary growth driver, expanding 9% quarter-on-quarter and 46% year-on-year, followed by loan against property (LAP), which grew 5% quarter-on-quarter and 19% year-on-year. Fresh disbursements stood at ₹919 crores for the quarter and ₹3,508 crores for the full year, registering growth of 20% and 23% year-on-year, respectively.

The loan book remained predominantly secured, with approximately 98% of the portfolio collateralised, and around 89% of the non-corporate portfolio secured by immovable properties or bank FDRs. The average ticket size of the portfolio stood at ₹18.3 lakhs, compared to ₹17.8 lakhs at the end of Q3 FY26. Geographically, advances outside Punjab constituted 24% of the total portfolio as of March 31, 2026, up from 21% a year earlier, with out-of-Punjab advances growing at more than twice the Punjab growth rate on a year-on-year basis.

Asset Quality Improvement

Asset quality showed improvement during the quarter, with key NPA metrics moving favourably both sequentially and year-on-year.

Management noted that write-offs remained almost nil during the quarter and that the increase in credit cost was driven by a deliberate enhancement of the provision coverage ratio rather than credit losses. The NBFC-MFI segment, which had seen stress earlier in the year, reported an outstanding net NPA of ₹5.49 crores as of Q4 FY26, compared to ₹6.08 crores a quarter earlier, with no fresh lending extended to this segment during the quarter.

Deposits and Liability Franchise

Total deposits crossed ₹10,000 crores for the first time, reaching ₹10,018 crores, representing 20% year-on-year growth. Deposits constituted over 94% of outside liabilities, with the retail deposit share remaining above 90%. The CASA ratio stood at 34.7% as of March 31, 2026, with savings deposits at ₹3,182 crores, constituting 31.76% of total deposits.

The cost of deposits declined to 5.75% in Q4 FY26 from 5.86% in Q3 FY26, reflecting the initial impact of term deposit repricing. Management noted that approximately 53% of the present term deposit book is priced above current offered rates and is due for repricing in Q1 and Q2 of FY27. The average credit-to-deposit ratio stood at 82.3% for the quarter, with the end-of-period ratio at 86.7%, compared to 80.4% and 82.2%, respectively, in Q3 FY26.

Network Expansion and Strategic Outlook

As of March 2026, the bank's branch network expanded to 211 branches across 5 states and 2 union territories, with 77.3% of branches classified as semi-urban and rural (SURU) branches. Management outlined targets to reach 235 branches by the end of FY27 and over 300 branches by FY29. Key strategic and financial guidance shared during the earnings call is summarised below:

Management also indicated that the transition to the Expected Credit Loss (ECL) framework is not expected to be profit-and-loss negative for the bank, with the initial assessment suggesting a P&L neutral to P&L positive outcome. The bank's business correspondent lending channel, which commenced operations in the current quarter with multiple partners, is intended to supplement—but not replace—the primary branch-led business acquisition model, with over 90% to 95% of disbursements expected to continue through the branch network.

Capital Small Finance Bank Limited has published its newspaper advertisement of audited financial results for FY26 under Regulation 47, following the bank's strong performance announcement. The bank reported net profit of ₹14,139 lacs for FY26, up from ₹13,165 lacs in FY25, with Q4 FY26 net profit at ₹4,008 lacs compared to ₹3,424 lacs in the corresponding quarter of the previous year.

Regulatory Compliance and Publication

Pursuant to Regulations 47 and 52(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the bank published the extract of audited financial results in 'Business Standard' English newspaper and 'Nawan Zamana' regional newspaper on April 30, 2026. The advertisement was also made available on the bank's website at capital.bank.in/investors/advertisement-regulation-47.

Key Financial Performance Highlights

Operational Performance Metrics

The bank demonstrated strong operational growth with advances increasing 20.9% year-on-year and deposits growing 20.4% year-on-year. The Current Account Savings Account (CASA) ratio stood at 34.7% in Q4 FY26, while disbursements grew 20.1% year-on-year during the quarter. Pre-Provision Operating Profit (PPoP) and Profit After Tax (PAT) showed robust growth of 28.2% and 17.0% respectively for Q4 FY26.

Asset Quality and Capital Strength

The bank maintained healthy asset quality with Net NPA improving to 1.24% in Q4 FY26 from 1.35% in Q3 FY26. Earnings per share (basic) for FY26 stood at ₹31.20 compared to ₹29.18 in the previous year. The board of directors approved these financial results in its meeting held on April 29, 2026, with Company Secretary Amit Sharma signing the regulatory communication to stock exchanges.