Earnings Review
Capital Small Fin PAT flat; NII offsets labour code impact
This story was originally published at 16:50 IST on 29 January 2026
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--Capital Small Fin Bank Oct-Dec net profit INR 344.1 mln vs INR 340.5 mln
--Capital Small Fin Bank Oct-Dec total income INR 2.98 bln vs INR 2.53 bln
--Capital Small Fin Bank Oct-Dec provisions INR 57.8 mln vs INR 21.6 mln
--Capital Small Fin Bank net NPA ratio 1.35% as on Dec 31 vs 1.38% qtr ago
--Capital Small Fin Bank gross NPA ratio 2.68% as on Dec 31 vs 2.70% qtr ago
--Capital Small Fin Bank Apr-Dec net profit INR 1.01 bln vs INR 974.1 mln
--Capital Small Fin Bank Apr-Dec total income INR 8.48 bln vs INR 7.37 bln
By Shweta
MUMBAI – Capital Small Finance Bank Ltd. reported a nearly flat on-year net profit growth for the December quarter as a double-digit growth in the net interest income was offset by a significant rise in the lender's total expenses.
The bank's net profit for Oct-Dec was INR 344.1 million for the quarter, largely unchanged from year ago and quarter ago. The bottom line was contained by a one-time cost of INR 51.3 million to account for the incremental impact of gratuity and leave encashment provisions in view of the implementation of new labour codes.
The lender's net interest income rose over 11% on year and nearly 7% sequentially to INR 1.19 billion for the December quarter. The Jalandhar-based lender's total income for Oct-Dec grew nearly 18% on year and nearly 7% on quarter to INR 2.98 billion. This growth was supported by 42% on-year increase in income from wholesale banking to INR 326.4 million and nearly 41% on-year growth in income from other banking operations to INR 133.3 million during the quarter.
The bank made provisions of INR 57.8 million for the reporting quarter. It had made provisions and contingencies of INR 21.6 million in the year-ago quarter. The sharp rise in provisions also limited the rise in the bank's bottom line.
Capital Small Finance Bank's gross non-performing asset ratio improved marginally to 2.68% at December-end from 2.70% as on Sept. 30. The net non-performing asset ratio was 1.35% as on Dec. 31, down from 1.38%. The lender reported "one of the lowest write-offs in the banking industry with zero NPA (non-performing assets) sell-off," it said in a press release. The credit cost remained stable at 0.20% for the December quarter, with the help of strong underwriting capabilities, visibility of borrower cash-flow, and primary banking approach.
The bank's gross advances grew 20% on year and 3% sequentially to INR 81.64 billion for the December quarter. The deposits rose 18% on year and 7% on quarter to INR 99.31 billion.
The net interest margin was unchanged from a quarter ago, at 4%, for the December quarter. The current account savings account ratio remained healthy at 35.9% for the reporting quarter, up from 34% as on Sept. 30, and the average current account savings account was at 35.7% for the December quarter.
The lender reported a 25% on-year growth in disbursements to INR 9.19 billion for the latest quarter. "The disbursement spread across the sectors and growth driver for the quarter is MSME/business segment (QoQ 10%) and LAP (QoQ 3%). Yield on advances remained stable during quarter at 11% during Q3FY26 (Oct-Dec) & Q2FY26 (Jul-Sept)," the bank said in its investor presentation.
The bank's net profit for Apr-Dec grew 4% on year to INR 1.01 billion and total income rose nearly 15% on year to INR 8.48 billion. Capital Small Finance Bank also reappointed Executive Director Munish Jain as whole-time director for three years, effective Aug. 28.
The bank's December quarter earnings were announced during market hours. On Thursday, shares of the bank ended nearly 1% lower at INR 254.85 on the National Stock Exchange. End
Edited by Tanima Banerjee
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