Capital Small Finance Bank Q4: Advances up 20.9% YoY

What the latest quarterly business update showed

Capital Small Finance Bank reported double-digit year-on-year growth in both loans and deposits in its latest quarterly update. Gross advances rose 20.9% YoY to Rs 8,687 crore from Rs 7,184 crore. Deposits increased 20.4% YoY to Rs 10,018 crore from Rs 8,323 crore. On asset quality, gross NPA eased to 2.54% compared with 2.58% a year ago. The update keeps focus on how the Jalandhar-based small finance bank is balancing growth with credit quality.

Loans and deposits: the core numbers

The bank’s quarterly numbers indicate that lending growth has remained ahead of deposit growth, though both were around the 20% mark. The advance book at Rs 8,687 crore builds on the base of Rs 7,184 crore reported earlier. Deposits at Rs 10,018 crore highlight continued mobilisation, which matters for funding costs and liquidity. Separately, the bank has previously disclosed that as of March 31, 2025, gross advances were Rs 7,184 crore, with year-on-year growth of 17% at that time. For the year ended March 31, 2025, it also reported loan disbursements of Rs 2,846 crore, up 38% YoY.

Asset quality snapshot: GNPA down, NNPA steady in disclosures

The latest update showed gross NPA at 2.54%, down from 2.58% a year ago. In the bank’s quarterly financial table shared in the provided data, gross NPA percentages were 2.67% (Dec 2024), 2.58% (Mar 2025), 2.74% (Jun 2025), 2.70% (Sep 2025) and 2.68% (Dec 2025). Net NPA in the same table stayed in a tight range: 1.35% (Dec 2024), 1.30% (Mar 2025), 1.39% (Jun 2025), 1.38% (Sep 2025) and 1.35% (Dec 2025). In management commentary, the bank said net NPA currently stands at 1.35% and it is targeting bringing it below 1% over time.

Profit trend in recent quarters

The quarterly table in the provided information shows profit before tax (PBT) and net profit moving within a narrow band through FY26 quarters captured there. PBT was Rs 45.64 crore in Dec 2024 and Rs 44.99 crore in Mar 2025, before shifting to Rs 42.51 crore (Jun 2025), Rs 46.37 crore (Sep 2025) and Rs 45.89 crore (Dec 2025). Net profit was Rs 34.05 crore (Dec 2024), Rs 34.24 crore (Mar 2025), Rs 32.01 crore (Jun 2025), Rs 34.89 crore (Sep 2025) and Rs 34.41 crore (Dec 2025). Another data point included in the material shows net income of Rs 32.01 crore for the last quarter versus Rs 34.24 crore in the previous quarter.

Full-year FY25 performance: income, costs, and profitability

For FY25, the bank reported interest earned of Rs 908.50 crore and other income of Rs 86.02 crore. Interest expended stood at Rs 498.30 crore, while operating expenses were Rs 310.79 crore. Total provisions were Rs 10.30 crore. Profit before tax for FY25 was Rs 175.13 crore and net profit was Rs 131.65 crore, with adjusted EPS of Rs 29.10.

The narrative note in the provided data also states the bank’s profit after tax for FY25 was Rs 132 crore, registering 18% YoY growth. It added that return on assets improved to 1.4% in FY25 from 1.3% in FY24, and net interest margin increased to 4.2% in FY25 from 3.9% in FY24.

Management’s growth targets through FY29

In an interview excerpt included in the material, the bank said it is targeting to double its loan book to around Rs 16,000 crore by FY29. It also indicated an intent to improve return on total assets to around 1.6% by FY29. The management described the portfolio as predominantly secured, stating around 99% of overall lending is secured and about 90% of the non-corporate loan book is backed by immovable property. It also said the bank is not targeting a credit-deposit ratio above 90% and aims to move it to the mid-to-high 80% range over two to three years.

Segment mix and operating levers highlighted

The bank has described MSME lending as a key growth driver, with typical ticket sizes ranging from Rs 10 lakh to Rs 3 crore. It said MSME grew 10% quarter-on-quarter and 42% year-on-year in the referenced commentary. It also cited growth in mortgage lending, including housing loans to middle-income borrowers and loans against property, with the mortgage segment growing 18% year-on-year and 3% quarter-on-quarter in the same discussion. On liabilities, it said around 90% of deposits come from retail customers and about 76% of deposits originate from rural areas.

Key metrics at a glance

FY21 to FY25 income and profitability trend

Market impact and why investors track these datapoints

For a small finance bank, the combination of advance growth, deposit mobilisation, and NPA movement is closely watched because it links directly to funding stability and credit costs. The reported 20.9% YoY growth in gross advances and 20.4% YoY growth in deposits signal that balance sheet expansion is continuing alongside deposit gathering. The easing in gross NPA to 2.54% from 2.58% provides a credit-quality datapoint that can influence how markets assess provisioning needs. Separately, FY25 metrics such as ROA at 1.4% and NIM at 4.2% indicate the operating profile the bank is trying to build on.

Conclusion

Capital Small Finance Bank’s latest quarterly update showed around 20% YoY growth in both loans and deposits, along with a marginal improvement in gross NPA. Alongside these numbers, management has articulated a target to scale the loan book to around Rs 16,000 crore by FY29 while working towards net NPA below 1% over time. Future updates on deposit costs, margins, and segment-level growth will remain key inputs for tracking execution against these stated goals.