Capital Small Finance Bank (CSFB) has demonstrated resilience and growth in its Q2 FY26 performance, despite facing challenges from floods in northern India. The bank reported a 17.7% year-on-year increase in gross advances, reaching INR 7,907.00 crores, while maintaining asset quality and expanding its deposit base.

Key Financial Highlights

• Gross Advances: INR 7,907.00 crores, up 17.7% year-on-year
• Total Deposits: INR 9,317.00 crores, a 20% year-on-year growth
• CASA Ratio: 33.9%
• Net Interest Margin (NIM): 4.04%, compared to 4.1% in the previous quarter
• Profit After Tax: INR 35.00 crores, a 5% year-on-year increase
• Gross NPA: Improved to 2.70% from 2.75% in the previous quarter
• Net NPA: 1.38%

Loan Book Composition and Growth

The bank's loan book remains well-diversified across sectors:

Fresh disbursements for the quarter stood at INR 805.00 crores, registering a robust 36% year-on-year growth. The bank maintains its FY26 growth guidance of over 20% for advances and aims to double its loan book over the next three to three-and-a-half years.

Deposit Growth and Expansion Strategy

CSFB's total deposits reached INR 9,317.00 crores, marking a strong 20% year-on-year growth. The bank's expansion strategy focuses on deepening its presence in contiguous states and intensifying penetration within existing markets. Currently, the bank operates 200 branches, with plans to increase this to 300 by FY29, targeting 30% of branches outside Punjab.

Asset Quality and Risk Management

Despite the flood impact in northern regions affecting some Punjab districts, CSFB's asset quality remained stable. The bank's prudent risk management practices and diversified portfolio helped mitigate the impact of natural calamities. The gross NPA improved to 2.70% from 2.75% in the previous quarter, while net NPA stood at 1.38%.

Future Outlook

Capital Small Finance Bank remains optimistic about its growth prospects, targeting to double its loan book by FY29. The bank aims to improve its Return on Assets (ROA) to 1.6% and Return on Equity (ROE) to over 15% by FY29. With a strong capital adequacy ratio of 24.2% and an average liquidity coverage ratio of 234%, CSFB is well-positioned for sustainable growth in the coming years.

The bank's performance in Q2 FY26 demonstrates its ability to navigate challenging environments while maintaining growth momentum. As CSFB continues to expand its geographical footprint and diversify its loan book, it is poised to capitalize on opportunities in India's growing banking sector.

Capital Small Finance Bank (CSFB) has reported robust financial results for the second quarter, showcasing steady growth across key business metrics. The bank also unveiled ambitious expansion plans, aiming to double its loan book to ₹16,000 crores by FY29.

Financial Highlights

CSFB demonstrated strong performance in Q2:

• Gross advances rose 17.7% year-on-year to ₹7,907.00 crore
• Deposits increased 19.8% year-on-year to ₹9,317.00 crore
• Profit After Tax (PAT) grew 4.6% year-on-year to ₹35.00 crore
• Return on Assets (RoA) improved to 1.3% from 1.2% in the previous quarter

The bank maintained a healthy asset quality with Gross Non-Performing Assets (GNPA) at 2.70% and Net Non-Performing Assets (NNPA) at 1.38%, showing a slight improvement from the previous quarter.

Key Financial Metrics

Growth Strategy and Future Outlook

Mr. Sarvjit Singh Samra, Managing Director & CEO of Capital Small Finance Bank, commented on the results: "The quarter ended September 30 was marked by healthy credit offtake and stable margins, reflecting the strength of our core operating model."

The bank has outlined an ambitious growth strategy, targeting to:

1. Double its loan book to ₹16,000+ crores by FY29
2. Expand its branch network to 300+ locations by FY29
3. Improve profitability metrics, aiming for a Return on Assets (RoA) of 1.6%+ by FY29

Expansion Plans

CSFB is focusing on expanding its presence beyond its core markets:

• Entering new states like Uttar Pradesh and Gujarat
• Intensifying penetration in current markets (Haryana, Punjab, Rajasthan & Delhi)
• Targeting 30%+ branches outside Punjab by 2029 (currently at 17.5%)

Business Focus

The bank continues to emphasize:

• Organic loan book growth in MSME, Mortgages, and Agriculture segments
• Maintaining a secured lending portfolio (currently at 99.2% secured loans)
• Elevating its retail-focused liability franchise
• Strengthening operational efficiency to enhance profitability

Capital Small Finance Bank's strong quarterly results and ambitious growth plans reflect its commitment to expanding its presence in the small finance banking sector while maintaining robust financial health and asset quality.