Aim to bring net NPA below 1% in next two years: Capital SFB
April 29, 2026
Capital Small Finance Bank (CSFB) is pivoting toward a high-efficiency growth model in FY27, targeting a sub-1% Net NPA ratio and a return on assets (RoA) of up to 1.4%.
“In the past six months, we have improved it from 1.35% to 1.04%, showing solid progress. We plan to sustain this momentum,” said Jain. He added that the bank targets to maintain credit cost in the range of 0.15-0.25% going forward compared to the current 0.26%.
Asset Quality Roadmap
The lender’s asset quality has improved in the quarter. Gross non-performing asset ratio improved to 2.54% from 2.68% in the previous quarter, and net NPA improved fell to 1.24% from 1.35% in Q3. The SFB reported a year-on-year growth of 17% in its net profit to Rs 40 crore.
The bank expects further margin expansion in FY27 driven by higher credit-deposit ratio and deposit repricing. “These deposits will be repriced, delivering benefits across Q1 and Q2, with 50% of repricing still pending. Combined with a higher credit-deposit ratio targeting mid-to-high 80s medium-term, both will fuel margin expansion in FY27,” the senior official said.
The net interest margin (NIM) expanded to 4.06% in the fourth quarter compared to 4.01% in Q3.
Fueling the Bottom Line
The bank targets return on assets (ROA) of 1.35-1.4% in FY27 and over 1.6% by FY29, while aiming for 22% advance growth this fiscal to hit Rs 16,000 crore by FY29. The banks’ advances grew 21% to Rs 8,687 crore, while deposits rose 20% to Rs 10,018 crore. The return on assets of the bank declined marginally to 1.33% in Q4 from 1.36% in the year-ago quarter.
On the geopolitical front, Jain said there is no impact yet, however, the bank is monitoring closely all the developments.
Asset Quality Roadmap
The lender’s asset quality has improved in the quarter. Gross non-performing asset ratio improved to 2.54% from 2.68% in the previous quarter, and net NPA improved fell to 1.24% from 1.35% in Q3. The SFB reported a year-on-year growth of 17% in its net profit to Rs 40 crore.
The bank expects further margin expansion in FY27 driven by higher credit-deposit ratio and deposit repricing. “These deposits will be repriced, delivering benefits across Q1 and Q2, with 50% of repricing still pending. Combined with a higher credit-deposit ratio targeting mid-to-high 80s medium-term, both will fuel margin expansion in FY27,” the senior official said.
The net interest margin (NIM) expanded to 4.06% in the fourth quarter compared to 4.01% in Q3.
Fueling the Bottom Line
The bank targets return on assets (ROA) of 1.35-1.4% in FY27 and over 1.6% by FY29, while aiming for 22% advance growth this fiscal to hit Rs 16,000 crore by FY29. The banks’ advances grew 21% to Rs 8,687 crore, while deposits rose 20% to Rs 10,018 crore. The return on assets of the bank declined marginally to 1.33% in Q4 from 1.36% in the year-ago quarter.
On the geopolitical front, Jain said there is no impact yet, however, the bank is monitoring closely all the developments.