CSB Bank targets FY28 ROA of 1.5–1.8% in Q2 concall

CSB Bank Limited (CSBBANK) has shared its outlook in the Q2FY27 earnings call. The bank expects FY27 ROA at 1.29–1.5%, with an aspirational target of 1.5%, and aims for 1.5–1.8% in FY28. NIM guidance is maintained at 3.75–3.80% versus 3.81% in Q2, with FY28 NIM expected around 3.75%. Cost of funds is targeted to decline to approximately 6% in FY28 from the current 6.55%. Long-term loan growth is targeted at 30–50% above industry levels, subject to deposit mobilisation. Business growth is expected to accelerate from FY28 across wholesale, SME and retail. CASA growth is expected to outpace term deposits from FY28. Gold loan contribution is targeted to fall to 50% of advances by FY27-end and 32% by FY30. Gold loans grew 36% YoY and corporate loans rose 44% YoY. SME growth is expected to recover from Q3FY27. Retail expansion is planned from FY28. Core fee income is guided at 14–15% of total income, with overall fee income potentially reaching 18–20% longer term. Further asset quality improvement is expected over the next 2–3 quarters; current GNPA is 1.58% and NNPA is 0.33%. The key triggers are the ROA trajectory toward 1.5% in FY27 and 1.5–1.8% in FY28, alongside plans to reduce gold loan concentration and lower cost of funds. This supports a shift toward a more diversified and higher-quality growth mix. Peers such as Federal Bank, Karur Vysya Bank, and City Union Bank may face comparison on ROA, NIM, and loan growth. Near-term prices could react positively if execution on guidance remains on track. Risks include low CASA ratio, gold loan concentration, technology expenses, gold price volatility, and any regulatory changes in bancassurance. Competitors listed: Federal Bank, Karur Vysya Bank, City Union Bank. We have no financial interest in this news.