Capital Small Finance Bank Achieves Double-Digit Growth in Q1 FY26 Amid Strong Retail Focus
By Shishta Dutta | Updated at: Oct 14, 2025 05:38 PM IST
Mumbai, 3 July 2025: Capital Small Finance Bank Ltd (NSE: CAPITALSFB | BSE: 544120) has posted a solid business performance for the first quarter of FY26, showcasing double-digit growth in both advances and deposits. The bank’s consistent retail-led approach and focus on secured lending have played a pivotal role in sustaining growth, even as the asset quality remains stable.
At 12:54 PM IST, Capital Small Finance Bank Ltd was trading at ₹282.60, down ₹1.90 (0.67%) from the previous close. The day’s trading range was between ₹281.20 and ₹287.00. The stock opened at ₹286.05 and last recorded ₹282.90 at 11:45 AM. The company’s market capitalisation stood at ₹1.28K crore, with a P/E ratio of 9.71, dividend yield of 1.42%, and a quarterly dividend of ₹1.00.
Advances Grow 16.4% YoY on Back of Secured Lending Strategy
Capital SFB reported gross advances of ₹7,437 crore as of June 30, 2025, reflecting a 16.4% increase compared to ₹6,391 crore in Q1 FY25. The bank disbursed ₹865 crore during the quarter, up nearly 15% from ₹754 crore in the corresponding quarter last year. The loan portfolio continues to be highly secure, with 99.8% of loans backed by collateral, reinforcing its low-risk approach to credit expansion.
Stable Asset Quality Reflects Strength in Risk Management
The bank maintained its Gross NPA ratio at 2.7% for Q1 FY26, consistent with the figure recorded in Q1 FY25. Although marginally higher than the 2.6% in Q4 FY25, the number highlights sustained asset quality in a changing interest rate landscape. The management attributed this performance to disciplined underwriting standards and a well-established recovery mechanism.
Deposits Surge 17.1% YoY; Retail Franchise Drives Growth
Total deposits grew to ₹9,110 crore, marking a 17.1% YoY increase from ₹7,778 crore, and a sequential rise of 9.5% from ₹8,323 crore in Q4 FY25. The growth underscores the bank’s strength in attracting and retaining retail depositors. While the CASA ratio dipped slightly to 35.9% from 36.9% in the previous quarter, it remains at a competitive level amid industry-wide trends favouring term deposits.
Loan-to-Deposit Ratio Moderates; Liquidity Remains Strong
The average credit-deposit (CD) ratio came in at 80.9% for Q1 FY26, compared to 82.5% in Q4 FY25. This slight moderation indicates healthy balance sheet management, aligning credit growth with deposit inflow. The liquidity coverage ratio (LCR) stood at a robust 214.7%, ensuring ample liquidity to support future business growth and regulatory compliance.
Management Highlights Positive Lending Climate and Strategic Focus
The management acknowledged a supportive macroeconomic environment, shaped by easing interest rates and accommodative monetary policy. “Our focus remains on quality over quantity. We continue to prioritise secured retail lending, which offers stable repayment behaviour and lower credit risk,” the management noted.
Retail Disbursement Momentum Sustained by Sectoral Tailwinds
Quarterly disbursements reached ₹865 crore, up from ₹754 crore in Q1 FY25. The rise was driven by demand across secured retail segments, reaffirming the bank’s positioning within its core customer base. The strategy aims to balance asset growth with credit discipline, ensuring long-term stability.
Strong Liquidity Buffer Positions Bank for Future Growth
The 214.7% liquidity coverage ratio not only meets regulatory norms but also provides a cushion for future expansion. This robust liquidity position enhances the bank’s ability to scale operations without compromising financial stability.
CASA Ratio Sees Marginal Decline But Remains Competitive
Though the CASA ratio slipped to 35.9% from 36.9% last quarter, it continues to reflect healthy retail engagement. The trend mirrors a wider industry shift, as customers gravitate toward higher-yielding term deposits in a softening interest rate environment.
About Capital Small Finance Bank Ltd
Capital Small Finance Bank Ltd, based in Jalandhar, Punjab, was the first small finance bank to begin operations in India in 2016. With listings on both NSE and BSE, the bank has built a reputation for secured, retail-centric lending and a strong deposit franchise. Its approach focuses on sustainability, risk control, and customer-centric growth.
Key Financial Highlights (₹ in crore)
| Particulars | Q1 FY26 (Jun 30, 2025) | Q1 FY25 (Jun 30, 2024) | YoY Growth | Q4 FY25 (Mar 31, 2025) | QoQ Growth |
|---|---|---|---|---|---|
| Gross Advances | 7,437 | 6,391 | 16.4% | 7,184 | 3.5% |
| Gross NPA (%) | 2.7% | 2.7% | — | 2.6% | — |
| Total Deposits | 9,110 | 7,778 | 17.1% | 8,323 | 9.5% |
REF: https://nsearchives.nseindia.com/corporate/CAPITALSFB_03072025122736_BusinessUpdateQ1FY26signed.pdf
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