CSBBANKNSEQ4 FY2026May 4, 2026

CSB Bank Limited

9,353words
51turns
8analyst exchanges
2executives
Management on call
B.K. Divakara Executive Director
CSB BANK
Satish Gundewar Chief Financial Officer
CSB BANK
Key numbers — 40 extracted
50 basis point
emain highly volatile. As a result of higher crude prices, Indian growth is expected to reduce by 50 basis points as per certain estimates. The inflation forecast has been revised upwards and RBI expects the in
4.6%
on forecast has been revised upwards and RBI expects the inflation for the next year to be around 4.6%. The deposit growth continues to lag the credit growth, raising the bulk deposits and CD rates in
Rs.633 Crore
t; but hope you can hear me properly. On profitability highlights, Net profit for FY2026 stood at Rs.633 Crores with 7% growth over FY2025 and for Q4 2026, Net profit of Rs.202 Crores was registered with a se
7%
hear me properly. On profitability highlights, Net profit for FY2026 stood at Rs.633 Crores with 7% growth over FY2025 and for Q4 2026, Net profit of Rs.202 Crores was registered with a sequential
Rs.202 Crore
rofit for FY2026 stood at Rs.633 Crores with 7% growth over FY2025 and for Q4 2026, Net profit of Rs.202 Crores was registered with a sequential quarterly growth of 32%. Operating profit of the bank grew by 1
32%
and for Q4 2026, Net profit of Rs.202 Crores was registered with a sequential quarterly growth of 32%. Operating profit of the bank grew by 19% on a FY basis and stood at Rs.1085 Crores as on
19%
es was registered with a sequential quarterly growth of 32%. Operating profit of the bank grew by 19% on a FY basis and stood at Rs.1085 Crores as on March 31, 2026. Net interest in
Rs.1085 Crore
tial quarterly growth of 32%. Operating profit of the bank grew by 19% on a FY basis and stood at Rs.1085 Crores as on March 31, 2026. Net interest income grew by 17% on a full FY basis to Rs
17%
s and stood at Rs.1085 Crores as on March 31, 2026. Net interest income grew by 17% on a full FY basis to Rs.1720 Crores and NII grew by 25% for Q4 FY2026 versus Q4 FY2025. Other in
Rs.1720 Crore
res as on March 31, 2026. Net interest income grew by 17% on a full FY basis to Rs.1720 Crores and NII grew by 25% for Q4 FY2026 versus Q4 FY2025. Other income grew by 21% and constituted 2
25%
ch 31, 2026. Net interest income grew by 17% on a full FY basis to Rs.1720 Crores and NII grew by 25% for Q4 FY2026 versus Q4 FY2025. Other income grew by 21% and constituted 21% of the total income
21%
basis to Rs.1720 Crores and NII grew by 25% for Q4 FY2026 versus Q4 FY2025. Other income grew by 21% and constituted 21% of the total income for FY2026. The cost-to-income ratio for FY2026 stood m
Guidance — 20 items
Pralay Mondal
opening
“Consequently, Federal Open Market Committee, BOE and EU have kept the rates on hold cautiously with the guidance that they may have to increase it subsequently.”
Pralay Mondal
opening
“Global growth forecast remains subdued and financial markets are likely to remain highly volatile.”
Pralay Mondal
opening
“The inflation forecast has been revised upwards and RBI expects the inflation for the next year to be around 4.6%.”
Pralay Mondal
opening
“We expect the banking sector NIM to remain under pressure due to rising costs and unabating volatility.”
Pralay Mondal
opening
“We expect the liquidity to remain easy and RBI to stay on hold for longer in this financial year in the wake of impact on domestic and global growth.”
Pralay Mondal
opening
“We are now leveraging the capabilities of the new core system and surround systems to launch the full retail product bouquet - both on the deposit and assets front and with the new/revamped products, we plan to meaningfully kickstart our retail franchise journey by Q4 FY2027/Q1 FY2028 - when we will start seeing the portfolio growing on the asset side.”
Pralay Mondal
opening
“We have also revamped our organizational structure with a sharp focus on customer acquisition across verticals, which will be critical to the success of our vision.”
Pralay Mondal
qa
“Besides, when you balance it out - the same deposit when taken in the next quarter, we have to pay a lower cost.”
Pralay Mondal
qa
“There are various products which we plan to launch every quarter, because now we have the system to launch, which we previously did not have.”
Pralay Mondal
qa
“Having said that, the main job will be to build the liability franchise now.”
Risks & concerns — 15 flagged
Higher crude prices for an unduly long period definitely pose inflation risk.
— Pralay Mondal
Global growth forecast remains subdued and financial markets are likely to remain highly volatile.
— Pralay Mondal
We expect the banking sector NIM to remain under pressure due to rising costs and unabating volatility.
— Pralay Mondal
So it is little difficult; but hope you can hear me properly.
— Pralay Mondal
On the liquidity side, bank has managed liquidity risk efficiently.
— Pralay Mondal
Proportion of risk-weighted assets continue to be lower compared to the industry.
— Pralay Mondal
While our corporate portfolio has progressed as envisaged and planned, our calibrated and cautious approach adopted towards our MSME/BLG business and unsecured portfolios - amidst an adverse operating environment - along with liquidation of the loan against security as per regulatory prescription - where the security has been primarily gold as a collateral, has resulted in a relatively higher share of gold loans during the year.
— Pralay Mondal
Importantly, our gold loan portfolio has managed to be pretty risk-free with strict oversight on parameters such as LTV, price sensitivity and risk metrics, ensuring a healthy and profitable book.
— Pralay Mondal
Also how do you see the impact of new guidelines on the LCR?
— Suraj Das
Lastly, if you can comment on the NRI deposit flow, how it is trending, let us say, during the March quarter and if you have seen any slowdown post-March, particularly because of this West Asia crisis.
— Suraj Das
At this point, LCR is not our concern because we are significantly higher than these levels and NSFR is around 122%, which also gives comfort that we are on track on that front.
— Pralay Mondal
Without a core system, without all surround systems and solutions, building something is difficult and will carry a cost and we did not want to do that earlier.
— Pralay Mondal
The reason for that is, on the regulatory guidance there was some challenge before on the collateral free loans, which has now been clarified and changed favourably.
— Pralay Mondal
There is no risk at all in the gold loan portfolio.
— Pralay Mondal
Given that perspective, I think we are sitting on a fair bit of margin in terms of risk.
— Pralay Mondal
Q&A — 8 exchanges
Q
Hi Pralay sir. Thanks for the opportunity. Sir, I had a few questions. First, on your LCR it has been declining over the past two quarters and probably now in the lowest quartile in the sector. What is the rationale behind it? Why is it declining? Also how do you see the impact of new guidelines on the LCR? More broadly, I think, how should one think about this in the context of growth because especially in your case, the deposit growth is lagging not just for you, but also for the system as you highlighted, but in your case, the deposit growth is increasingly driven by wholesale bulk deposit,
Pralay Mondal
Thank you so much for the questions. Let me cover one by one. On the LCR, average for quarter ended March was around 109% and as we are talking today the number is significantly better compared to that point of time. We all know that March being a year/quarter end, the kind of deposit rates which were there in the ecosystem. As our bulk deposits are around 50% and our CASA being slightly on the lower side, we had to play tactically on this one while maintaining the average LCR on a comfortable level. We could have easily taken it to 115%, but we have to incur higher cost for that. Besides, whe
Q
Good evening, Sir. Thank you for the opportunity. Sir, my first question is on your scale strategy. So, as we enter into the scale phase of SBS 2030 strategy from this year onwards, could you please update on the progress of the retail transformation on the asset side? When do we expect growth to meaningfully pick up in retail and SME and what kind of numbers should we expect in FY2027? My second question is on fee income side, which picked up strongly so I wanted to understand the key drivers, so like last quarter, PSLC income was missing, so has this come back this quarter and was there any
Pralay Mondal
Thanks, Akshat for the questions. Starting with the retail assets - we are first focusing on retail liabilities because our retail strategy is very clear. For assets, which are earning assets and the way we define them are businesses like commercial vehicles, commercial equipments, health care and to some extent inventory funding, and auto loans - a consumption business that is secured; are the ones we would grow beyond our liability franchise, which means through dealerships including our internal customers. Any other product which is on the consumption side, we will do it on the back of our
Q
Thanks a lot for the opportunity, Sir. So first, what is the impact of ECL on the day of transition?
Pralay Mondal
I will give a one-line answer to this and our CFO - Satish will respond in detail. At a high level, what we understand is, though various components are there, the large impact items are on the SMA front by way of the stage wise provisioning floor norms that ranges from 0.40% to 5% including 1.5% for gold loans. While this will be a large impact item on the negative side. on the positive side, we will be able to or we have to now write back the contingency provision of Rs.105 Crs and the entire Rs.210 crores of provisions above the regulatory prescriptions should be subtracted from the additio
Q
Thank you for the opportunity. This question is more from a long-term perspective. This is probably your sixth year in CSB and from the start I think the idea was to grow liabilities, which somebody asked and you answered that it has taken its time and on the retail assets, and the business has done well, and we have been beneficiary of gold prices, but on the retail, etc., I look at the last four years, five years, it has been a fairly tepid growth than what we would have thought through or planned for and even now if I understood correctly, what you said was that this will pick up in the Q4
Pralay Mondal
As a bank, we do not want to address retail assets similar to an NBFC model, because the whole approach is different when you are in a bank. I have also been on the Board of NBFCs before like HDB and Axis Finance and there was a time when I used to handle both the bank and NBFCs together when I was in HDFC Bank. As a bank, we are not here to build asset book first, but to build a franchise where liability comes first and assets follows and in the process, liability also grows because EMIs and other things happen in their accounts. That is the approach we are taking and hence even if it takes a
Q
Thank you. Sir, just on your NIM, the reported NIM were flat Q-o-Q and advances growth at 9% Q-o-Q and deposit growth is 10%, but the NII growth is only 2% - what am I missing here. That is the only question I have.
Pralay Mondal
NII growth quarter-on-quarter is lower, but year-on-year is 25%. Your question is more on quarter-on-quarter. Yes, quarter -on -quarter. Like, how do I reconcile this because the loan growth has been 9%, and NII growth is only in the range of 2% Our quarterly advance growth is 9% and the NIM has fallen by two or three basis points over Q3. On a year on year basis i.e., vis a vis Q4 FY 25, the NII is up by 25%. Our yields have fallen sharply and cost of deposits or cost of funds has increased, which has impacted the NIM. In spite of a significant improvement on the quality of the portfolio, whi
Q
I just wanted to know if your CTO is on the call?
Pralay Mondal
CTO is not on the call, but I will try to answer. No, actually, it was regarding this recent AI-related cybersecurity threat that even our FM kind of, came online and spoke about. Just wanted to understand if there are any implications on the new update that we have just rolled out and with regards to Anthropic , a lot of banking software are sort of already said to be under upgradations now in the next two years and since we just rolled out our software, I wanted to understand if you are up to date with that or not? Yes, certainly. Any other question, I will respond to this? We have been talk
Q
Thank you for the opportunity again, Sir. On margins, would you say NIM has largely bottomed out and what kind of trajectory do we expect from here, if not quantitatively, at least qualitatively and what were the drivers of the yield compression. Was it just higher share of wholesale lending because gold yields increased on a portfolio level or was it coming from the full impact of the December repo rate curve flowing through P&L and MCLR repricing. That was my first question Sir. I have one more. On the SME book, out of the 10 to 11 accounts that slipped last quarter, how many accounts have b
Pralay Mondal
Akshat, I think I have understood your question, though the voice is breaking. Let me try and answer that. On the margins, the general guidance which I have always given is that, it will be between 3.75% to 4%. We are right in the middle of it, somewhere at 3.83% in Q4 FY 26. I think it is very difficult to predict in basis points that it will go up or go down, but it will remain in the range of 3.75% to 3.8%. Having said that, I am not so sure if it has bottomed out or not because of two reasons. One is our own internal portfolio, where the business mix will start gradually changing. I do not
Q
Thank you very much and look forward to everybody joining the call again in Q1. Thank you. Have a good evening.
Management
Speaking time
Pralay Mondal
18
Moderator
9
Narendra Gandhi
5
Suraj Das
3
Akshat Agrawal
3
Parth Gutka
3
Punit Bahlani
3
Akshat Agarwal
3
Vibhor Talreja
2
Shivaji Thapliyal
1
Opening remarks
Shivaji Thapliyal
Thank you Swapnil. Good evening and a warm welcome to all those who have joined the call. The CSB Bank Management is represented by Mr. Pralay Mondal, Managing Director and CEO, Mr. B. K. Divakara, Executive Director and Mr. Satish Gundewar, Chief Financial Officer. We specifically thank the management of CSB Bank for giving Yes Securities the opportunity to host their result call. Management will first be making some opening remarks, after which we will throw the floor open for questions. I now invite the management to make their opening remarks. Pralay, over to you!
Pralay Mondal
Thank you, Shivaji, and thanks everybody for joining our annual and Q4 analyst call. To start with, we will brief on the global economic scenario. As we all know that the West Asian crisis has been continuing for more than two months now in a row with probability of further escalations being large, though de-escalations cannot be ruled out altogether. Higher crude prices for an unduly long period definitely pose inflation risk. Consequently, Federal Open Market Committee, BOE and EU have kept the rates on hold cautiously with the guidance that they may have to increase it subsequently. Global growth forecast remains subdued and financial markets are likely to remain highly volatile. As a result of higher crude prices, Indian growth is expected to reduce by 50 basis points as per certain estimates. The inflation forecast has been revised upwards and RBI expects the inflation for the next year to be around 4.6%. The deposit growth continues to lag the credit growth, raising the bulk depo
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