Private sector lender CSB Bank is accelerating its transformation into a diversified, pan-India bank by expanding its retail, wholesale and MSME portfolios, while gold loans will continue to remain a key pillar providing stability and liquidity. The Kerala-headquartered bank is investing heavily in technology and distribution under its long-term SBS 2030 strategy.
In his message to shareholders in the bank’s Annual Report 2025-26, Managing Director & CEO Pralay Mondal said the bank is reshaping its portfolio mix to build a more resilient and balanced franchise while maintaining strong profitability and asset quality.
Portfolio diversification underway
As part of the growth strategy, the bank is progressively diversifying its loan book. CSB Bank has set a long-term portfolio mix target of 19-21% retail, 30-32% wholesale, 30-35% gold loans, and 17-18% MSME lending, supported by the expansion of its retail and wholesale businesses and deeper penetration into the MSME segment.
Mondal said the strategy would also create opportunities for cross-selling and improve revenue diversification.
Profitability and asset quality targets
The bank is targeting a steady-state Return on Assets (RoA) of 1.4-1.5% and a Return on Equity (RoE) of over 15%, with the potential to exceed these levels during its next growth phase.
Although the cost-to-income ratio is expected to remain elevated in the near term due to continued investments in technology and infrastructure, the bank expects operational efficiencies to improve from FY2027-28 onwards.
CSB Bank also aims to maintain Gross NPAs below 2%, Net NPAs below 1%, while keeping credit costs within 40-50 basis points, reflecting its continued focus on disciplined risk management.
New business lines planned
To broaden its revenue streams, the bank plans to launch wealth management services for retail customers and establish debt capital market capabilities for wholesale banking by FY2028-29.
According to Mondal, these initiatives will expand the bank’s product suite and enable deeper, lifecycle-based customer relationships.
Technology transformation completed
FY2025-26 marked a major milestone for CSB Bank with the completion of one of its largest technology modernisation programmes.
The bank migrated to a new core banking system and implemented more than 50 supporting systems spanning payments, digital channels and financial management.
Mondal said the transformation has replaced legacy systems with a modern, scalable architecture, enabling faster product launches, improved operational efficiency, enhanced service reliability and a better customer experience.
The upgraded technology platform, backed by modular architecture and advanced data centres, is expected to support higher transaction volumes as the bank enters its next phase of growth.
Retail banking enters growth phase
CSB Bank is also strengthening its retail banking franchise by aligning products, distribution channels and customer engagement processes with evolving consumer needs.
The bank said it has sharpened customer acquisition, onboarding and relationship management capabilities to create a differentiated banking experience while preparing for scalable growth.
Pan-India expansion
As part of its expansion strategy, CSB Bank plans to add 40-50 branches every year as it works towards a network of 1,000 branches across India.
Mondal said the expansion would be measured and productivity-driven, with customer experience taking precedence over rapid scale, ensuring sustainable long-term growth.
He added that strengthening the liability franchise through current accounts, TASC accounts, specialised savings products, integrated payment solutions and customised lending offerings would remain central to the bank’s growth strategy.