Transcript of the earnings call Q2 of FY2027

“CSB Bank Limited Q2 FY2027 Earnings Conference Call” October 23, 2026, 05.00 PM IST MANAGEMENT: MR. PRALAY MONDAL MANAGING DIRECTOR & CEO - CSB BANK MR. B.K. DIVAKARA EXECUTIVE DIRECTOR - CSB BANK MR. SATISH GUNDEWAR CHIEF FINANCIAL OFFICER - CSB BANK ANALYST: MR. SHIVAJI THAPLIYAL YES SECURITIES LIMITED CSB Limited October 23, 2026 Moderator: Ladies and gentlemen, good day and welcome to CSB Bank Limited earnings call for Q2 FY2027 financial results hosted by Yes Securities Limited. Please note that all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. With that, I hand over the call to Mr. Shivaji Thapliyal from Yes Securities. Thank you and over to you, sir. 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. The 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. Thank you, everybody, for joining our call for Q2 FY2027. Let me start by wishing everybody Happy Diwali in advance. On the macroeconomic side, especially in the banking landscape, the global environment continues to be uncertain. Financial market volatility and geopolitical uncertainties continue to persist. Global growth is revised upwards to 3.1% for 2026 and 3.4% in 2027, with stagflation risk continuing to remain a possibility. Global inflation is also projected to move upwards to 4.7%. Mid-term elections in the US and some agreement on ceasefire with Iran will decide the future course in energy prices and global growth. On the domestic front, RBI has revised upwards India's GDP growth to 7.1%, along with several other global agencies like ADB and IMF. India continues to be one of the fastest growing major economies in the world and is outperforming global peers. The major setback to the Indian economy this year is rising crude prices, which put pressure on INR and domestic rates. Central Bank has brought currency situation under control by opening the FCNR swap window for banks on NRI deposits and have raised repo rates to contain inflation. The excess liquidity that persisted in the system due to FCNR deposits is gradually getting neutralized . On the growth outlook, the economic outlook for India remains positive. The resilience in Indian economy is largely due to robust domestic demand, government infra-spending and steady service sector, even as global geopolitical and trade headwinds continue to pose external risks. India remains the fastest-growing economy in the world despite facing exceptionally high crude oil prices. The growth outlook remains robust, however, continued conflict in Gulf and second-order impact of El Niño may knock off few basis points in the coming quarters. Monetary, regulatory, and fiscal policies remain aligned with the growth Page 2 of 16 CSB Limited October 23, 2026 objectives, with RBI projecting a real GDP growth of 7.1% and CPI inflation expectation of 5.2% in FY2026-27. Coming to CSB specifics, overall, we had a fairly good quarter. On the profitability side, net profit stood at Rs.183 Crores for Q2 FY2027, with a sequential growth of 22% and Y-o- Y growth of 14% over Q2 FY2026. Operating profit of the bank grew sequentially by 10% and stood at Rs.276 Crores for Q2 FY2027. Net interest income stood at Rs.510 Crores for Q2 FY2027, growing by 7% Q-on-Q and 20% on a Y-o-Y basis. Other income grew sequentially by 20% over Q1 FY2027, while other income excluding treasury profit grew by 27%. Cost to income ratio for Q2 FY2027 stood at 64.8%. NIM for Q2 stood at 3.81%, as against 3.66% for Q1 FY2027 and 3.81% for Q2 FY2026. ROA for the quarter ended 30th September 2026 stood at 1.29% as against 1.09% for Q1 FY2027. Contingency provisions are held intact and bank is continuing with accelerated loan provisioning policy, which will aid the bank in transitioning towards the ECL framework. On the liability side, deposits recorded a strong Y-o-Y growth of 18%, CASA ratio stood just short of 19% - at 18.96%. To aid the liquidity, we also availed both domestic and FCY borrowings based on cost and tenor considerations. The liquidity risk was well managed. CD ratio stood at 90.39%. Average LCR for the quarter is 127%. NSFR ratio at 124%. On the asset growth, gross advances registered a Y-o-Y growth of 22%. Yield on advances for Q2 FY2027 stood at 10.92% as against 10.65% in Q1 FY2027. Asset quality metrices looked pretty good. The GNPA and NNPA ratios for the quarter stood at 1.58% and 0.33% respectively. PCR now stands at 87.65% with PWO and 79.19% without PWO. Bank is holding a provisioning buffer of around Rs.177 Crores over and above the regulatory requirements. On the capital side, CRAR continued to be well above the regulatory requirement and stood at 19.55%. Tier 1 ratio stood at 18.54%. Proportion of risk-weighted assets continued to be lower compared to the industry. On the shareholder value creation, book value per share stands at Rs.290. EPS for Q2 FY2027 stood at Rs.42 as against Rs.35 for Q1 FY2027. ROE for the quarter improved from 12.71% Q1 FY 2027 to 14.74% in Q2 FY2027. Talking of distribution, we have a network of 872 branches and 844 ATMs as at September end 2026. In conclusion, we believe that we delivered healthy growth across our key business metrices during this quarter, reflecting sustained business momentum. Deposits grew by 18%, while advances registered 22% growth YoY. Our liquidity profile remained comfortable with average LCR of 127% and NSFR of 124%. We continued to optimize our cost of funds through a balanced mix of deposits, borrowings, foreign currency borrowings, certificate of deposits and other funding sources like refinance, etc, while maintaining an optimal liability tenor profile. Page 3 of 16 CSB Limited October 23, 2026 On the asset side, we achieved healthy momentum across gold and corporate segments with Y-o-Y growth of 36% and 44% respectively. Growth in the SME segment remained moderate as we continued to adopt a calibrated and cautious approach. We will start seeing the growth on the SME side from this quarter onwards because most of the portfolio-related issues we faced in SME book for the last one-and-a-half years have been by and large corrected now. Growth in retail portfolio, excluding gold, was driven mainly from secured or income-generating assets, while we chose to degrow on loan against security, which is primarily loan against gold for the repledger businesses, which as per regulation, we have effectively stopped and it has almost zeroized now. On the unsecured book like cards, Agri, MFI, etc., due to regulatory and other risk considerations we have remained cautious. Effective management of funding costs and asset yields enabled us to improve our net interest margin to 3.81% from 3.66% in Q1 FY2027. As I said before, the wholesale banking momentum is picking up well across all the three segments, but I will talk about it a little later. From a profitability perspective, our performance remained strong with net profit growing by 14% compared to Q2 FY2026. Net interest income recorded a healthy growth of 20% over Q2 FY2026. Asset quality remains stable and key metrices continued to be strong and well within our stated guidance. The efforts undertaken during the Sustain-and Build phases of our SBS 2030 journey have established a solid foundation aligned with our long-term vision. Our focus is now to expand our geographical footprint and deepen rela [Showing first 8,000 characters — download PDF for full document]