Capital Small Finance Bank delivered a strong performance in Q3FY26, demonstrating consistent growth across key business metrics while maintaining stable margins and improving asset quality. The bank's results reflect disciplined execution of its strategy focused on secured lending and retail deposit mobilization.

Financial Performance Highlights

The bank's financial metrics for Q3FY26 showed robust growth across multiple parameters:

The bank achieved quarterly disbursements of ₹919 crores, marking a significant 25% year-on-year increase, supported by festive season demand and strong rural cash flows. For the nine months ending December 2025, total disbursements reached ₹2,590 crores, reflecting 24% growth.

Asset Quality and Risk Management

Asset quality metrics showed marginal improvement during the quarter:

The slippage ratio improved significantly to 1.21% from 1.73% in Q2FY26, while write-offs remained minimal during the quarter. The bank maintained its provision coverage ratio above 50%, reaching 50.46% compared to 49.5% in the previous quarter.

Deposit Growth and Liability Management

The bank's deposit franchise demonstrated strong momentum with total deposits crossing ₹9,931 crores, registering 18.5% year-on-year and 7% quarter-on-quarter growth. The CASA ratio improved to 35.9% from 33.9% in Q2FY26, underlining the strength of the retail deposit base.

The cost of deposits began trending downward, declining to 5.86% from 5.92% in Q2FY26, reflecting initial benefits from term deposit repricing. Management expects more meaningful repricing benefits over the next six months, with 63% of existing term deposits scheduled for repricing across the next three quarters.

Business Segment Performance

The bank's diversified portfolio showed balanced growth across key segments:

• MSME/Business Segment: Grew 42% year-on-year and 10% quarter-on-quarter, increasing its portfolio share to 25% from 23% in Q2FY26
• Agriculture Segment: Moderated to 28% from 30% in Q2FY26, maintaining stable asset quality
• Mortgage Portfolio: Remained stable at 26%, with LAP accounting for 15% and housing loans 11%
• Corporate Segment: Maintained 14% share

Geographically, advances outside Punjab continued outpacing overall bank growth, with the out-of-Punjab portfolio constituting 24% as of December 31, 2025, compared to 21% in Q3FY25.

Profitability and Operational Efficiency

Profitability metrics remained stable despite temporary margin pressures:

*Excluding exceptional item of INR5.13 crores related to New Labour Code implementation

The bank maintained strong capital adequacy at 21.6% with average LCR of 215.8%, providing substantial headroom for future growth. The branch network expanded to 203 branches across 5 states and 2 union territories, with SURU branches accounting for 76% of the network and contributing 75% to deposits.

Strategic Outlook and Guidance

Management provided comprehensive guidance for future growth:

• FY26 Targets: 20%+ advance growth, maintaining current trajectory
• FY29 Vision: Advance book exceeding INR16,000 crores, 300+ branches
• Profitability Goals: ROA expansion to 1.6%+ and ROE of 15%+ by FY29
• NIM Expectations: 3-5 basis points improvement in Q4FY26, with 10-15 basis points enhancement in subsequent quarters

The bank expects NIM expansion supported by deposit cost moderation from repricing, with 23% of high-cost deposits maturing in Q4FY26, 46% in Q1FY27, and 27% in Q2FY27. This repricing schedule positions the bank favorably for margin improvement in the coming quarters.

Capital Small Finance Bank Limited has announced its participation in an upcoming investor conference, providing stakeholders with an opportunity to engage with the bank's management team. The announcement comes as part of the bank's ongoing investor relations activities and regulatory compliance obligations.

Conference Details

The bank will participate in the Manthan – Systematix Annual India Conference, with the following schedule:

Regulatory Compliance

The bank has made this announcement in accordance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. As part of its commitment to transparency and regulatory compliance, Capital Small Finance Bank has specifically noted that no unpublished price sensitive information will be shared during the investor meetings.

Meeting Format and Participation

The conference will feature both one-on-one meetings and group sessions, allowing for diverse interaction formats between the bank's officials and various stakeholders. This structure enables both detailed discussions in smaller settings and broader presentations to larger groups of analysts and institutional investors.

Important Considerations

The bank has included a cautionary note regarding potential schedule changes, stating that any unforeseen exigency on the part of the company or host may lead to changes in date or time. This provision ensures flexibility while maintaining transparency about potential modifications to the announced schedule.

The announcement was signed by Amit Sharma, Company Secretary & Compliance Officer, emphasizing the bank's commitment to proper governance and regulatory adherence in its investor relations activities.