Capital Small Finance Bank Q3 Performance: Net Profit Surges 17% to Rs 34 Crore with Strong Margin Growth

Capital Small Finance Bank has demonstrated robust financial performance in the third quarter of FY 2024-25, with significant improvements across key performance indicators and strategic business segments.

Financial Performance Highlights

The Jalandhar-headquartered bank has posted impressive growth in its Q3 results, with net profit rising 17% to reach Rs 34 crore, compared to Rs 29 crore in the corresponding quarter of the previous year. The bank's operating performance showed remarkable strength, with operating profit increasing by 20% to Rs 48 crore from Rs 40 crore year-on-year.

Margin Improvement and Strategic Focus

A standout aspect of the bank's performance has been the significant improvement in its net interest margin (NIM), which reached 4.3% in Q3, up from 3.9% in the year-ago period. The bank has set an ambitious target to further enhance its NIM to 4.4%, demonstrating its commitment to profitability improvement.

Business Growth and Portfolio Quality

The bank's loan portfolio showed robust growth with:

• Advances growing 19% year-on-year to Rs 6,816 crore
• An impressive 99% of the loan portfolio comprising secured loans
• Deposits increasing by 12% to Rs 8,384 crore
• A healthy CASA ratio of 39%, reflecting strong liability management

Strategic Initiatives and Future Outlook

The bank has outlined clear strategic priorities for the upcoming fiscal year:

• Enhanced focus on expanding non-fund based business operations
• Continued emphasis on building strong customer relationships across both asset and liability segments
• Strategic focus on the north-west belt of India, leveraging regional expertise

Management Perspective

The bank's leadership has expressed confidence in its business model and growth strategy. Executive Director Munish Jain highlighted the focus on non-fund based business expansion, while Managing Director Sarvjit Singh Samra emphasized the importance of strong customer relationships in overcoming deposit mobilization challenges.

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