ESAF Small Finance Bank Back in Black, Posts Rs 80 Cr Profit in Q1

New Delhi: ESAF Small Finance Bank on Friday turned the corner and posted a Rs 80 crore profit during the first quarter ended June 30, aided by higher income and decline in bad loans.

The Kerala-based lender had booked a loss of Rs 81 crore in the year-ago period.

Total income increased to Rs 1,346 crore from Rs 1,023 crore a year ago, ESAF Small Finance Bank said in a regulatory filing.

Interest income grew by 32 per cent to Rs 1,098 crore during the period under review, from Rs 828 crore a year ago.

Net Interest Margin of the bank improved to 7.9 per cent as compared to 6 per cent in Q1 FY26.

The bank’s asset quality improved with Gross Non-Performing Assets (NPAs) declining to 5.40 per cent of gross advances as of June 30, 2026, from 7.48 per cent by the end of first quarter of the previous fiscal.

Net NPAs as a percentage of net advances also declined significantly to 0.83 per cent, from 3.77 per cent a year earlier.

The provision coverage ratio also improved to 85.5 per cent compared to 73.2 per cent as of June 30, 2025.

However, provisions and contingencies increased to Rs 242 crore from Rs 234 crore earmarked during the same quarter a year ago.

The capital adequacy ratio of the bank improved to 23.86 per cent, as compared to 22.74 per cent on June 30, 2025.

The bank’s total business crossed Rs 50,000 crore for the first time, driven by robust growth in secured lending and retail deposits, reflecting the successful execution of its strategic transformation, it said.

Commenting on the quarterly numbers, ESAF Small Finance Bank MD and CEO K Paul Thomas said “Q1 FY27 reflects the steady progress of ESAF Bank’s transformation journey. Our strategy of building a diversified, secured and customer-centric portfolio is delivering encouraging results across growth, profitability and asset quality.” During the quarter, he said, total business crossed Rs 50,000 crore, while secured assets increased to 62 per cent of advances, strengthening the resilience of the bank’s balance sheet.

“We remain focused on expanding our presence across MSME, Agriculture, Retail, Gold Loans and the Emerging Household segment, while continuing to deepen financial inclusion,” he said.

(Disclaimer: Except for the headline, this article has not been edited by HDFC Sky editorial team and is auto-generated from PTI feed.)