ESAF Small Finance Bank reported Q2 interest income of ₹8.2 billion, but posted a net loss of ₹1.16 billion due to elevated credit costs and asset quality challenges. The bank’s earnings spotlight the ongoing stress in the microfinance portfolio despite efforts to strengthen its secured loan book.
ESAF Small Finance Bank revealed its financial results for the September quarter, posting an interest income of ₹8.2 billion. However, the bank recorded a net loss of ₹1.16 billion, reflecting sustained pressures from higher provisioning for non-performing assets and continued stress in the microfinance segment.
While the bank’s loan book saw some growth—driven by expansion in secured advances and stable total business volumes—provisioning against bad loans eroded profitability. Asset quality remains an area of concern, as gross non-performing assets (NPAs) stayed at elevated levels. Nevertheless, management remains focused on improving the loan mix, optimizing collection efficiencies, and maintaining strong capital ratios.
Despite the headline loss, robust deposit mobilization and ongoing digital transformation initiatives signal the bank’s intent to boot operational resilience. Leadership remains optimistic about long-term prospects, supported by a recovering microfinance environment and technology-led service delivery.
Key Highlights:
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Interest income for Q2 at ₹8.2 billion, indicating steady lending activity.
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Net loss of ₹1.16 billion, widening on account of heavy provisions for NPAs.
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Gross NPAs and credit costs remain high, driven by microfinance stress.
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Growth in secured loan advances; continued focus on strengthening the portfolio.
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Deposit base and retail customer engagement remain strong.
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Technology investments aimed at operational efficiency and customer service enhancement.
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Management committed to recovery and value creation through financial discipline.
Sources: Screener.in, Moneycontrol, Business Standard, ESAF Small Finance Bank filings