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CSB Bank reported a weak Q1FY27 performance

ICICIdirect Research 23 Jul 2026 DISCLAIMER

News: CSB Bank reported a weak Q1FY27 performance, as healthy balance-sheet growth was offset by margin pressure, lower fee income and weaker sequential profitability. Gross advances grew 24% YoY (1.3% QoQ) to ₹40,867 crore, led primarily by the corporate segment, while momentum in gold loans moderated sequentially; deposits rose 26% YoY (2.6% QoQ) to ₹45,415 crore, though CASA remained modest at 19.4%. NII increased 26% YoY (3% QoQ) to ₹479 crore, but NIM contracted 17 bps QoQ to 3.66% due to the full-quarter impact of high-cost March deposits, higher bulk funding and adverse mix. Other income declined 7% YoY, primarily due to sharply lower treasury gains and slower disbursements, which weighed on processing-fee income. Asset quality remained broadly stable, with GNPA/NNPA at 1.75%/0.39%, despite slippages of ~₹96 crore largely from SME, which management expects to be partly upgraded over Q2–Q3. PAT stood at ₹150 crore, up 27% YoY but down 26% QoQ, while RoA declined sequentially to 1.09% (vs 1.53% in Q4FY26).

View: Results were below expectations, with moderation in gold and retail disbursements, margin pressure and weaker fee income offsetting healthy balance-sheet expansion. Management continues to target FY27 RoA of 1.3–1.5%, supported by technology-led scale-up and expected SME upgrades over Q2–Q3; however, execution remains to be demonstrated, while potential large transaction by promoter continues to pose an ownership overhang with limited clarity.

Impact: Neutral

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