• Advances growth guidance: Capital Small Finance Bank maintained its full-year loan growth guidance of 22% plus after recording 22% year-on-year growth in advances in Q1. Growth momentum is being driven by strong festive demand and working capital utilization across MSME and trading segments.
• Margin expansion outlook: Following deposit repricing, the bank expects net interest margins to expand beyond the 4.21% reported in Q1. Management also projects a year-on-year improvement in Return on Total Assets (RoTA) for the full financial year.
• Portfolio and asset quality: Secured loans constitute 97.4% of the total loan book, with MSME accounting for 27%, agriculture 27%, mortgages 25%, and other loans 7%. Management reported sequential improvements in GNPA and NNPA in Q1, expecting credit quality to improve further with minimal risk from weather or geopolitical disruptions.
• Gold loan strategy: Gold loans remain a negligible component of the book under the 7% 'other' category and are offered primarily as an add-on product to existing retail and borrowing customers rather than as an aggressive standalone push.