Capital Small Finance Bank Registers 22% Advance Growth and Strengthening Asset Quality in Q1 Performance

Capital Small Finance Bank Limited has released its key business updates for the first quarter ended June 30, 2026. The bank kicked off the new fiscal year on a strong footing, demonstrating robust year-on-year expansion across its loan book and retail deposit franchise alongside a steady improvement in asset quality.

Robust Growth in Secured Advances

The bank's gross advances reached ₹9,074 crores as of June 30, 2026, marking a healthy 22.0% year-on-year (YoY) growth compared to ₹7,437 crores in the same quarter last year. On a sequential basis, advances climbed 4.5% from the ₹8,687 crores recorded on March 31, 2026.

Disbursements: Total credit disbursements for the quarter rose to ₹1,009 crores, representing a 16.5% increase over the ₹865 crores disbursed in the first quarter of the previous fiscal year.

Portfolio Quality: In line with its retail-focused, conservative lending approach, Capital Small Finance Bank's loan book remains highly secure, with approximately 98% of all advances backed by collateral.

Asset Quality Strengthens Further

The bank recorded a consecutive reduction in its non-performing assets, reflecting disciplined underwriting standards and effective recovery systems. Gross Non-Performing Assets (NPAs) dropped to 2.47% of gross advances for the quarter ended June 30, 2026. This shows a steady improvement from the 2.54% reported in the trailing quarter (March 31, 2026) and a significant decline from the 2.75% posted in the same period last year (June 30, 2025).

Expanding Deposit Base Led by CASA Growth

Total deposits at Capital Small Finance Bank increased to ₹10,596 crores as of June 30, 2026, up 16.3% YoY from ₹9,110 crores and 5.8% quarter-on-quarter (QoQ) from ₹10,018 crores.

The bank's low-cost deposit franchise showed enhanced momentum, with the Current Account Savings Account (CASA) ratio rising to 36.7% as of June 30, 2026. This is a noticeable improvement compared to 34.7% as of March 31, 2026, and 35.9% as of June 30, 2025, underlining deeper customer engagement and a solidifying retail liability foundation.

Comfortable Liquidity and Credit-Deposit Ratio

Driven by robust daily outstanding credit deployment, the bank's average Credit-Deposit (CD) ratio for the quarter stood at 83.1%. This positions the bank slightly above the 82.3% average recorded in the preceding quarter and the 80.9% average seen in June 2025. Management indicated that the bank's liquidity position remains comfortable and well-capitalized, giving it adequate financial flexibility to accelerate future growth.

Note: The financial data presented in this report for the quarter ended June 30, 2026, is provisional and subject to a limited review by the bank's statutory auditors, as well as formal approval from the Audit Committee and Board of Directors.

Source : Equity Bulls

Keywords

CapitalSmallFinanceBank BusinessUpdates Q1FY27