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ESAF Small Finance Bank reported a net profit of INR 24 crore for the March quarter of FY26, reversing a loss of INR 183 crore in the corresponding period a year earlier. The improvement was supported by growth in total income to INR 1,196 crore and a rise in operating profit to INR 241 crore. Interest income also increased during the quarter, reflecting lending activity. Asset quality showed improvement, with gross non-performing assets declining to 5.41% and net NPAs to 1.77%. Provisions were reduced compared to the previous year, contributing to profitability. The bank also strengthened its capital base by raising INR 150 crore through Tier II bonds, with its capital adequacy ratio improving to 22.2% at the end of the quarter.
ESAF Small Finance Bank reported a net profit of INR 24 crore for the March quarter of FY26, compared with a loss of INR 183 crore in the same period a year earlier, supported by higher income, improved operating performance and moderation in asset quality stress. The financial results were disclosed earlier in the past week. Advertisement
Total income for the quarter increased to INR 1,196 crore from INR 1,037 crore in the corresponding period of the previous financial year. Interest income rose to INR 995 crore, compared with INR 892 crore a year earlier, reflecting growth in the bank’s lending operations during the period.
Operating profit showed a significant improvement, rising to INR 241 crore from INR 91 crore in the year-ago quarter. The increase in operating performance, combined with a reduction in provisioning requirements, contributed to the return to profitability.
On the asset quality front, the bank reported a decline in gross non-performing assets (NPAs) to 5.41% of gross advances as of the end of March, compared with 6.87% a year earlier. Net NPAs also reduced to 1.77% from 2.99% over the same period, indicating improvement in recoveries and overall loan performance.
Provisioning requirements during the quarter declined, with provisions and contingencies (excluding tax) falling to INR 214 crore from INR 332 crore in the corresponding quarter of the previous year. The reduction in provisions supported the bank’s earnings during the period.
The bank also undertook capital-raising measures, mobilising INR 150 crore through Tier II bonds during the quarter. This contributed to strengthening its capital base and supporting future growth.
As a result, the capital adequacy ratio improved to 22.2% as of the end of March FY26, compared with 21.84% at the end of the previous financial year. The higher capital buffer provides additional headroom for expansion of the loan book and managing potential risks.
The performance reflects a recovery phase for the bank following challenges in the previous year, with a focus on improving asset quality and strengthening operational metrics. The combination of higher income, reduced stress on loan assets and disciplined provisioning contributed to stabilising financial performance during the quarter.
ESAF Small Finance Bank’s results indicate gradual improvement in its core financial indicators, including profitability, asset quality and capital adequacy, as it continues to consolidate its operations in the small finance banking segment.
Source - PTI
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