Capital Small Finance Bank Faces Evaluation Adjustment Amid Mixed Performance Indicators

Capital Small Finance Bank has recently undergone an evaluation adjustment, reflecting a revision in its score. This change is primarily attributed to a shift in its quality grade, which has transitioned from good to average.
In terms of financial metrics, the bank has demonstrated notable growth in net interest income and net profit over the past five years, with figures of 18.37% and 28.79%, respectively. The advance to deposit ratio stands at 78.47%, indicating a robust lending capacity. However, the gross non-performing assets (NPA) ratio is reported at 2.74%, with an average of 2.56%, suggesting some level of asset quality concerns. The coverage ratio averages 48.96%, while the cost to income ratio is at 61.98%, reflecting operational efficiency challenges.

The bank's net interest margin averages 4.35%, and the operating profit to assets ratio is 5.08%, contributing to a return on assets (ROA) of 1.14%. Despite these metrics, the stock has shown consistent underperformance against the benchmark over the last three years, with a return of -0.47% in the past year.

Overall, the evaluation adjustment highlights the bank's mixed performance indicators and market position within the banking sector.

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