CSB Bank shares plunge 14% on flat Q3 PAT, deterioration in asset quality. Here's what management said

Shares of CSB Bank plunged 14% to end the session at Rs 431 on the NSE after the company posted a flat net profit of Rs 153 crore in Q3 versus Rs 152 crore in the year-ago period. The company's asset quality deteriorated sequentially, with gross NPAs rising 15 bps to 1.96% versus 1.81% in Q2FY26.

Net NPAs stood at 0.67% in the December quarter against 0.52% in Q2FY26, recording a 15 bps quarter-on-quarter growth.

CSB Bank's net interest income (NII) in the December quarter jumped 21% YoY to Rs 453 crore from Rs 375 crore in Q3FY25. The NII was up 7%

QoQ from Rs 424 crore in Q2FY26.

Non-interest income was up by 26% YoY from Rs 219 crore for Q3FY25 to Rs 276 crore for Q3FY26.

Loans & deposits

Total deposits grew by 21% YoY from Rs 33,407 crore as on December 31, 2024, to Rs 40,460 crore in the quarter under review. The CASA ratio stood at 21% as of December 31, 2025.

The advances (Net) grew by 28% YoY from Rs 28,639 crore in Q3FY25 to Rs 36,677 crore in Q3FY26, supported by a robust growth of 46% in gold loans and 40% in Wholesale on a YoY basis.

Cost Income Ratio improved to 60% for Q3FY26 compared to 63% for Q3FY25 and 64% for Q2FY26.

The operating profit was up by 32% YoY from Rs 221 crore for Q3FY25 to Rs 292 crore for Q3FY26 and up by 5% QoQ from Rs 279 crore for Q2FY26.

Capital structure

Capital Adequacy Ratio stood at 19.41%, well above the regulatory requirement, the company filing said. CRAR as of December 31, 2024, was 21.08%.

Management commentary

"Our growth momentum remained strong during Q3 FY26 with a deposit growth of 21% and a gross advance growth of 29%, resulting in an overall growth of 25% in total business on a YoY basis. NII growth, along with our continued efforts on strengthening the other income streams and prudent cost management, led to an improvement in operating profit by 32% over Q3FY25. Q3 NIM was 3.86%, the highest on a quarterly basis during FY26," MD & CEO Pralay Mondal said.

On the asset quality, Mondal said that the bank's asset quality parameters are well within the guided range, though at a slightly elevated level from Q2 FY 26. "This will be a key monitorable going forward, and results would hopefully be visible during the current quarter itself. All other profitability, efficiency, liquidity, and capital adequacy ratios continue to be stable and in line with expectations," the MD & CEO added.

(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)