Equitas Small Finance Bank (EQUITASBNK) Q1 24/25 earnings summary

Executive summary

• Retail term deposits grew 47% year-on-year, with CASA ratio stable at 31% and current account balances up 32% year-on-year.

• Small business loans rose 27% year-on-year, now over INR 13,700 crores, and housing finance grew 35% year-on-year.

• Net profit for Q1FY25 was ₹26 crore, down 87% year-on-year, impacted by higher credit costs and floating provisions.

• Microfinance growth was muted at 6% year-on-year, with disbursements declining 29% year-on-year and collection efficiency dropping to 98.8%.

• Technology investments, including new digital products and the Selfie Loan App, are progressing well.

Financial highlights

• Net interest income for Q1 was INR 801-802 crores, up 8% year-on-year.

• Other income grew 28% to INR 192 crores, with total income for Q1 FY25 at ₹170,965.70 lakh.

• PAT for the quarter was INR 26 crores, impacted by a one-time floating provision of INR 180 crores.

• Operating profit before provisions was ₹34,039.79 lakh, up from ₹31,211.66 lakh in Q1 FY24.

• Advances grew 18% year-on-year and 2% quarter-on-quarter.

Outlook and guidance

• Loan growth guidance for FY25 remains at 25%, despite Q1 growth of 17-18%.

• Credit cost guidance for the year will be updated after Q2, pending clarity on microfinance trends.

• Board seeks shareholder approval for capital raise to strengthen Tier-II capital and support growth.

• Digital initiatives and new products are expected to improve efficiency and customer acquisition.

• Long-term goal is sustainable ROA of 2.25% and high-teen ROE within 3-4 years.