01 — At a Glance
A 98-Year-Old Bank Playing a Dangerous Growth Game
- 52-Week High / Low₹575 / ₹270
- Latest Quarter Revenue₹1,154 Cr
- Latest Quarter PAT₹153 Cr
- Annualised EPS (Q3×4)₹35.2
- Full-Year FY25 EPS₹34.23
- Book Value per Share₹271
- Price to Book1.29x
- Dividend Yield0%
- Gross NPA (Qtr)1.96%
- CD Ratio92%
The Setup: CSB Bank just reported ₹153 cr PAT. Deposits up 21% YoY. Advances up 29% YoY. But gross NPA exploded to 1.96%. Fairfax holds 40%. Promoter ownership fell 9.72% in 3 years. RBI gave them a ₹63.6 lakh penalty in Feb 2026 for BC arrangement non-compliance. The stock is down 15% in 3 months. Management on concall says Q3 is “peak stress” and they’re confident of reversal. That’s either refreshing honesty or beautiful denial. Place your bets.
02 — Introduction
The Bank That Inherited 100 Years of Baggage and Tried a Fairfax Makeover
CSB Bank. The Catholic Syrian Bank. Founded in 1920. Older than most independence movements. For decades, it was your uncle’s bank — the one that sat in Kerala, gave loans to people he knew, and treated technology like it was a Western conspiracy.
Then in FY19, Fairfax India bought a 51% stake. Suddenly, there was an IPO in 2021. A new CEO (Pralay Mondal). A CBS migration (Oracle software, which is very expensive). A strategy called “SBS 2030” (Sustain, Build, Scale). And a dream to become a pan-India bank by 2030, not just a Southern regional player.
Problem: growing 2x faster than the banking system is hard. Especially when your liability franchise is still regional and your funding costs are through the roof because everyone realizes you’re desperate for deposits. Q3 FY26 results just dropped, and they’re telling a story that sounds like “we’re growing beautifully but our credit quality is having a moment.”
Let’s dig into the numbers — with sarcasm, spreadsheets, and the concall insights that management probably regrets being so transparent about.
Concall Honesty Award: CEO literally said, “This is the peak in terms of credit cost” and “This is the peak of our slippage is my view.” In the middle of Q3, on a live call. Either the bank is courting humility or setting up for a glorious reversal narrative. Time will tell.
03 — Business Model: The Desperate Banker
Retail Gold. Wholesale Finance. SME Dreams. All Hitting at Once.
CSB’s business model is textbook regional bank trying to scale. Broken down: 59% retail banking (gold loans, personal loans, auto loans), 23% wholesale banking (corporates, capital markets, financial services), 14% treasury, and 4% SME. The bank is 846 branches strong as of Q3, with plans to add 40–50 branches per year.
The loan book is 51% gold loans. The rest is corporate, retail, and SME. The gold book is ₹14,094 cr as of FY25, with LTV recently brought down to 63% from higher levels. Management explicitly said they plan to reduce gold from 50–51% today to 25–30% by 2030. Wholesale should grow to >30%, SME to 18–20%, and diversified retail (auto, CV, healthcare finance) to make up the balance.
Deposits are the chokepoint. CASA ratio is only 20.5%. Bulk term deposits are 47% of term deposits. Depositors are concentration-heavy in the top 20 accounts at 22%. Meanwhile, the CD ratio is 92%, which means CSB is lending nearly every rupee it borrows. One bad quarter, one liquidity shock, and they’re scrambling for funding. They know it. The concall made this crystal clear.
Loan MixGold 51%FY25
Growth RateAdvances +29%YoY
Deposit Growth+21% YoYOutpacing industry
CASA Ratio20.5%Below system avg
The Fairfax Playbook: Fairfax injected ₹12 billion in FY18–FY19 to write off legacy NPAs. They hired seasoned management. They approved a CBS migration. They funded growth. But they can’t manufacture deposits overnight. CSB is now playing a volume game with a funding cost disadvantage. This is a “growth at all costs” moment, and costs are literally rising (deposit rates are at 5–6% for term deposits).
💬 If CSB grows advances at 29% but deposits only at 21%, how long can they sustain this without a funding crisis? Your thoughts in the comments?
04 — Financials Overview
Q3 FY26: The PAT is Flat, But Operating Profit is Up 32%
