Capital Small Finance Bank - Well Capitalised To Accelerate Growth: Systematix

Systematix Report

We recently interacted with the management of Capital Small Finance Bank Ltd. represented by Managing Director and Chief Executive Director Mr Sarvjit Singh Samra and Chief Financial Officer Mr Munish Jain. Key takeaways from the meeting were:

1. Flush from the capital infusion of Rs 5.23 billion, post the IPO in February 2024, the bank is geared towards delivering a loan growth of 22-24% in FY25. FY24 loan growth at 12% was subdued mainly due to the excess leverage on the balance sheet.

2. Management guided for credit-deposit ratio to increase to mid-80’s in the medium-term versus 79% average C-D ratio for FY24.

3. With deposit costs broadly stabilised, going forward, margins are expected to increase due to incrementally higher C-D ratio and flow through of marginal cost of funds based lending rate rate hikes taken in Q4/FY24.

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