Equitas Small Finance Bank’s Q4: Profit Holds Steady, NPA Drama Keeps Investors Guessing

Equitas Small Finance Bank has posted a consolidated net profit of ₹421.1 million for the March 2025 quarter, which demonstrates the bank's continued resilience in a competitive banking environment. The gross NPA ratio of the bank during the quarter was 2.89%, which management is confident of maintaining in the next financial year, indicating stable asset quality.

The quarter witnessed the bank traversing a one-off effect on NPAs on account of recent Reserve Bank of India clarifications regarding co-borrower accounts, which caused a chain effect in NPA classification. Even with this, Equitas Small Finance Bank's asset quality has almost returned to pre-pandemic levels, and the management is confident that gross NPAs will range between 2.5% and 2.6% in FY25.

Total quarter income increased to ₹1,685 crore from ₹1,394 crore during the corresponding period of the last year, led by a 22% increase in interest income from loans and a strong 56% rise in income from investments. The bank's net interest margin was healthy, and its net worth at the end of March 2025 was ₹5,969 crore.

Over the next few years, Equitas Small Finance Bank aims to grow loans by 25% in FY25 by ensuring a judicious credit-deposit ratio as well as credit cost. The bank also wishes to allocate ₹520 crore over three years to drive operational capabilities and facilitate sustainable growth.

Source: Economic Times, CNBC-TV18, Business Standard, Equitas SFB Investor Presentation