Q3 2026 Capital Small Finance Bank Ltd Earnings Call Transcript
Key Points
- Capital Small Finance Bank Ltd (NSE:CAPITALSFB) reported a strong year-on-year growth in total deposits by 18.5%, reaching INR9,931 crores, with a CASA ratio of 35.9%, indicating a robust retail deposit franchise.
- Gross advances increased by 19.8% year-on-year to INR8,164 crores, driven by robust disbursement across MSME, mortgage, and agriculture segments.
- The bank maintained stable asset quality with gross NPAs at 2.68% and net NPAs at 1.35%, supported by prudent credit practices.
- Net interest income grew by 11% year-on-year to INR119 crores, and non-interest income surged by 46% year-on-year to INR27 crores, reflecting strong operational performance.
- The bank's capital adequacy ratio remained strong at 21.6%, providing ample headroom for future growth and reaffirming its strong liquidity position.
- The bank faces persistent pricing pressure on term deposits due to intense competition for deposits, which could impact margins.
- There is a lag in the transmission of reduced lending rates to deposit rates, affecting the bank's ability to fully capitalize on interest rate cuts.
- The SMA-1 and SMA-2 pools have increased quarter over quarter, indicating potential stress in certain segments, although the bank expects this to normalize.
- The agriculture segment's gross NPA is relatively high at 4.7%, and the MFI segment has a gross NPA of 28%, indicating challenges in these areas.
- The bank's cost-to-income ratio, excluding exceptional items, remains relatively high at 60.9%, suggesting room for further cost optimization.
Ladies and gentlemen, good day, and welcome to the Capital Small Finance Bank Limited Q3 and nine-months FY26 earnings conference call. (Operator Instructions) Please note that this conference is being recorded.
I will now hand the conference over to Mr. Sarvjit Samra from Capital Small Finance Bank Limited for opening remarks. Thank you, and over to you.
Thank you, Rehan. Good afternoon, everybody, and thank you for joining Capital Small Finance Bank Limited's earnings call. Our financial results and the investor presentation have been filed with the stock exchanges and are available in the public domain. We trust you have had an opportunity to review them. Joining me today are Mr.
Munish Jain, Executive Director; Aseem Mahajan, Chief Financial Officer; Raghav Aggarwal, Chief Risk Officer; Sahil Vijay, Head of Treasury and Investor Relations; Bharti Babutta from our Investor Relations team; and our IR advisers, SGA.
I will
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