ESAF Small Finance Bank Posts Rs 160 Cr Profit in Sep Qtr

New Delhi: ESAF Small Finance Bank on Thursday posted its highest quarterly profit of Rs 160 crore in the second quarter ended September 30, on higher core income and a decline in bad loans.

The Kerala-based lender had booked a loss of Rs 116 crore in the year-ago period.

Total income increased to Rs 1,388 crore from Rs 965 crore in the corresponding period a year ago, ESAF Small Finance Bank said in a regulatory filing.

Interest income grew 43 per cent to Rs 1,175 crore during the period under review, from Rs 820 crore a year ago.

The bank’s Net Interest Margin improved to 8.2 per cent compared to 5.9 per cent in Q2 FY26.

The bank’s asset quality improved with Gross Non-Performing Assets (NPAs) declining to 2.84 per cent of gross advances as of September 30, 2026, from 8.54 per cent by the end of the second quarter of the previous fiscal.

Net NPAs as a percentage of net advances also declined significantly to 0.34 per cent, from 3.83 per cent a year earlier.

The provision coverage ratio also improved to 94 per cent as of September 30, 2026.

At the same time, provisions and contingencies declined to Rs 148 crore from Rs 249 crore earmarked during the same quarter a year ago.

The bank’s capital adequacy ratio rose to 24.14 per cent, compared to 22.43 per cent on September 30, 2025.

According to ESAF Small Finance Bank MD and CEO K Paul Thomas, Q2 FY27 marks an important milestone in the bank’s transformation journey, with record quarterly profitability, strong business growth and improving asset quality.

Going forward, he said, “We will continue to strengthen our core portfolio, deepen financial inclusion and advance our phygital strategy by combining our strong branch network with next-generation digital capabilities.”

The bank’s focus remains on delivering superior customer experiences, strengthening customer trust and achieving sustainable, profitable growth while staying true to our mission of inclusive banking, he added.

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