Shares of CSB Bank Ltd rose 2.27% to Rs 428.15 in Thursday’s trade after the Thrissur-based private lender reported a 16% year-on-year rise in net profit to Rs 160 crore for the July–September quarter of FY26, compared to Rs 138 crore in the same period last year.
Sequentially, profit jumped 35% from Rs 119 crore in Q1 FY26, supported by strong growth in net interest income (NII) and improved asset quality.
Q2 performance highlights
The bank’s net interest income (NII) rose 15% YoY to Rs 424 crore, up from Rs 367 crore in Q2 FY25, and 12% higher than Rs 379 crore in the previous quarter.
Gross non-performing assets (GNPA) improved to 1.81%, down from 1.84% a year earlier, while net NPA stood at 0.52%, compared to 0.66% in Q2 FY25.
Managing Director and CEO Pralay Mondal said, “The current quarter was good for us in all growth parameters. Asset quality improved over Q1 FY26, and the GNPA and NNPA ratios stood at 1.81% and 0.52%, respectively. All other profitability, efficiency, liquidity, and capital adequacy ratios continue to be stable and in line with expectations.”
Strong deposit and loan growth
CSB Bank’s total deposits grew 25% YoY to Rs 39,651 crore, from Rs 31,840 crore in September 2024. The CASA ratio stood at 21%.
Advances (net) rose 29% YoY to Rs 34,262 crore, driven by a 37% rise in gold loans. The bank expects 25–30% annual growth for FY26.
Margins and profitability
The lender’s net interest margin (NIM) and return on assets (RoA) improved by 27 basis points (bps) and 30 bps, respectively, compared to Q1 FY26.
Despite increased investments to drive growth, the cost-to-income ratio remained under control at 63.86%, slightly lower than both Q1 FY26 and Q2 FY25.
Non-interest income jumped 75% YoY to Rs 349 crore, while operating profit rose 39% YoY to Rs 279 crore.
Retail focus and strategic roadmap
Mondal emphasized that the bank plans to reduce its reliance on gold loans — currently 47% of total advances — to about 20% by 2030, while accelerating retail and digital expansion.
He added that the first phase of IT transformation is now stable, and the scale phase planned for FY27 will focus on strengthening CSB’s retail footprint and operational efficiency.
With robust capital buffers and liquidity, the Fairfax-backed bank aims to sustain its strong growth trajectory across upcoming quarters.
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