CSB Bank Q2 profit rises 16% to Rs 160 crore on strong income growth

Fairfax-backed CSB Bank reports higher profit and strong deposit growth in Q2, with stable asset quality and improved margins

Thrissur-based CSB Bank has reported a 16 per cent rise in profit after tax (PAT) for the second quarter of the current financial year to Rs 160 crore, compared to Rs 138 crore for the July–September quarter of FY25.

 

This also represents a 35 per cent rise from Rs 119 crore during the first quarter of FY26. The Fairfax-backed bank’s net interest income (NII) was up 15 per cent year-on-year, from Rs 367 crore for Q2 FY25 to Rs 424 crore for Q2 FY26, and up 12 per cent from Rs 379 crore in the previous quarter.

 

Its gross non-performing assets stood at 1.81 per cent as of September, compared to 1.84 per cent in Q2 last year. Net non-performing assets were at 0.52 per cent, down from 0.66 per cent a year ago.

 

 

Growth across all parameters

 

“The current quarter was good for us in all growth parameters. Asset quality improved over Q1 FY26, and the GNPA and NNPA ratios stood at 1.81 per cent and 0.52 per cent, respectively. All other profitability, efficiency, liquidity, and capital adequacy ratios continue to be stable and in line with expectations,” said Pralay Mondal, managing director and chief executive officer of CSB Bank.

 

The bank’s total deposits grew 25 per cent year-on-year, from Rs 31,840 crore in September last year to Rs 39,651 crore this year. The CASA ratio stood at 21 per cent. Advances (net) grew 29 per cent year-on-year, from Rs 26,602 crore to Rs 34,262 crore during the same period, supported by robust 37 per cent growth in gold loans. “Overall, we are expecting a 25–30 per cent growth this year,” Mondal added.

 

Margin and cost efficiency improve

 

“Net interest margin (NIM) and return on assets (RoA) improved by 27 basis points and 30 basis points, respectively, as compared to Q1 FY26. Despite the substantial investments to fuel growth, our disciplined cost management has helped us maintain the cost-income ratio within the guidance at 63.86 per cent — a tad lower than both Q1 FY26 and Q2 FY25,” he said.

 

Non-interest income rose 75 per cent year-on-year, from Rs 199 crore in Q2 FY25 to Rs 349 crore in Q2 FY26. The cost-income ratio stood at 64 per cent for Q2 FY26, lower than both Q2 FY25 and Q1 FY26. Operating profit was up 39 per cent year-on-year, from Rs 200 crore in Q2 FY25 to Rs 279 crore in Q2 FY26.

 

Focus on diversification and retail expansion

 

Mondal said the bank plans to reduce the share of gold loans in the total mix from around 47 per cent now to nearly 20 per cent by 2030, as he expects other sectors to grow.

 

“The first phase of the IT transformation is over and almost stable now. With the scale phase slated for FY27, we are diligently laying the groundwork to establish a robust foundation for achieving the targeted growth. Our strategic emphasis is on the granular retail journey, which we anticipate will be a key differentiator in the forthcoming scale phase. With strong liquidity and capital buffers, we are well-positioned to maintain our growth trajectory in the upcoming quarters,” he added.