Capital Small Finance Bank (Capital SFB) has outlined an ambitious medium-term growth plan, targeting a doubling of its loan book from just over Rs 8,000 crore to around Rs 16,000 crore by FY29. The bank is also aiming to improve its return on total assets to 1.6% by FY29. Management said there is enough growth potential within its existing segments and products, without making major changes to its business model.
The bank’s lending portfolio remains largely secured, with 99% of loans backed by collateral and nearly 90% of the non-corporate book secured by immovable property. MSME lending continues to be the primary growth driver, with ticket sizes ranging from Rs 10 lakh to Rs 3 crore. The MSME segment grew 10% quarter-on-quarter and 42% year-on-year. Mortgage lending, including housing loans for middle-income borrowers and loans against property for self-employed customers, rose 18% year-on-year and 3% quarter-on-quarter. The bank also lends Rs 5 lakh to Rs 25 lakh to middle-income agriculture borrowers. Its small corporate book accounts for 12–15% of the portfolio and will remain within that range, keeping the bank retail-focused.
On the liability side, around 90% of deposits come from retail customers, with 76% sourced from rural areas. The cost of deposits has fallen below 6%, and 91% of transactions are digital. The current credit-deposit ratio stands at 81%, with a medium-term target of mid-to-high 80% over the next 2–3 years, without exceeding 90%. Capital adequacy is above 21%, and the liquidity coverage ratio is over 115%, providing sufficient capacity for expansion.
Asset quality remains a priority, with net NPA at 1.35% and a target to bring it below 1% over time. The bank has not written off or sold NPAs, even during COVID, and continues to focus on recoveries. While becoming a universal bank remains a long-term goal, there is no immediate plan to apply. Management said the focus for the next 3 years is on doubling the loan book and strengthening key performance metrics before considering a universal banking licence.
Also read: Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream LinkedIn | The Mainstream Facebook | The Mainstream Youtube | The Mainstream Twitter
About us:
The Mainstream is a premier platform delivering the latest updates and informed perspectives across the technology business and cyber landscape. Built on research-driven, thought leadership and original intellectual property, The Mainstream also curates summits & conferences that convene decision makers to explore how technology reshapes industries and leadership. With a growing presence in India and globally across the Middle East, Africa, ASEAN, the USA, the UK and Australia, The Mainstream carries a vision to bring the latest happenings and insights to 8.2 billion people and to place technology at the centre of conversation for leaders navigating the future.
