Capital Small Finance Bank targets to double its loan book to Rs 16,000 crore by FY29 from Rs 7,907 crore at present, a senior executive told FE in an interview.
“We believe the biggest driver will continue to be MSME and mortgage, followed by the agriculture book,” Munish Jain, executive director, said. These three segments together would continue to form 75-80% of the total portfolio. The bank maintains its guidance of a 20% growth in the loan book.
The MSME or the business segment grew 33% on year, followed by loan against property within mortgage, which grew 22% on year as on September 30, according to an investor presentation.
Deposits grew 20% on year to Rs 9,317 crore, with the current account and savings account (CASA) ratio at 33.9%. The bank will continue to focus on retail deposits with a high share of CASA.
The small finance bank aims to expand its branch network 1.5 times by FY29, from 199 branches currently. It aims to enter Uttar Pradesh and Gujarat and intensify its penetration in current markets. It plans to have more than 30% of branches outside Punjab by 2029, from 17.5% at present.
The bank would also be looking at increasing its gold loan book. “We are internally evaluating the gold loan business since the PSL requirement has now become 60%,” Jain said.
The small finance bank reported a year-on-year growth of 5% in its net profit to Rs 35 crore for the quarter ended September. The net interest margin (NIM) stood at 4.04%. The bank targets to have the NIM at 4.1% in the second half of FY26 and upwards of 4.2% in FY27.
The gross non-performing assets (NPA) ratio stood at 2.70%, lower than 2.75% a quarter ago. The net NPA ratio improved to 1.38% from 1.39%.
Shares of Capital Small Finance Bank on Wednesday closed 0.4% higher at Rs 286.35 on the NSE.