Equitas Small Finance Bank Financial Q4 FY23 Results

Chennai, May 2023: The Board of Directors of Equitas Small Finance Bank Limited at its meeting held today, approved the audited financial results for the quarter and full year that ended March 31, 2023

Highest Quarterly PAT of Rs. 190 Cr in Q4FY23, growth of 59% YoY

Quarterly disbursement at Rs. 5,917 Crs in Q4FY23, growth of 80% YoY

Gross advances at Rs. 27,861 Crs with a growth of 35% YoY

Highest RoA and RoE of 2.28% and 15.52% respectively

Board recommended a maiden dividend of Rs. 1 per equity share for FY23

1. Key Highlights for Q4FY23:

Core operating performance remained strong despite the sharp rise in interest rate
Highest ever broad-based disbursements of Rs. 5,917 Crs with new products continuing to scale-up. Growth of 80% YoY and 23% QoQ
Gross advances at Rs. 27,861 Crs with a growth of 35% YoY and 12% QoQ
Deposits grew 34% YoY and 8% QoQ to reach Rs. 25,381 Crs
Q4FY23 saw a 20bps increase in CoF sequentially to 6.61%, for the year ended with a CoF of 6.38%
The receipt of the AD-1 license to further strengthen the product suite

2. Business Highlights:

Asset Updates:

Q4FY23 disbursement at Rs. 5,917 Crs, growth of 80% YoY
Strong disbursement across all product segments, with the Bank’s flagship product – SBL clocking a YoY disbursement growth of 56%
Newer products like Housing Finance, Used Car, and Merchant OD continue to scale-up
Advances as of Q4FY23 were at Rs. 27,861 Crs, a growth of 35% YoY

Liabilities:

Total deposits grew 34% YoY to Rs. 25,381 Crs
CASA deposit grew 9% YoY to Rs. 10,732 Crs. CASA ratio stood at 42%
Term Deposits grew 61% YoY to Rs. 14,649 Crs
Retail Term Deposits grew 25% YoY to Rs. 8,883 Crs. Retail Term Deposits contribute 61% of total term deposits

Key Ratios:

NIM remains stable and healthy at 9.10%
Cost to Income improves to 58.09% in Q4FY23 as compared to 63.95% in Q3FY23 and 56.85% in Q4FY22
RoA and RoE for Q4FY23 at 2.28% and 15.52%

Capital:

Networth of the Bank crosses Rs. 5,100 Crs
As of March 31, 2023, Total CRAR is at 23.80% | Tier I at 23.08%, and Tier II at 0.72%
Board recommended a maiden dividend of Rs. 1 per equity share (10% of face value) for FY23

Treasury & Liquidity:

The Bank’s Certificate of Deposit (CD) program has the highest rating at A1+ from CRISIL and India Ratings (CRISIL A1+ for Rs. 500 Crs and IND A1+ for Rs. 100 Crs)
The Bank has adequate eligible advances available to raise funds through refinance or IBPC whenever required which provides a strong cushion to the ALM position of the Bank
The Bank currently maintains ‘surplus’ liquidity in the form of High-Quality Liquid Assets (HQLA). The liquidity Coverage Ratio (LCR) as of 31.03.2023 is 182%
Profit on sale of Investments for the quarter is Rs. 2.67 Crs, MTM depreciation on investments on the quarter is Rs. 1 Crs

3. Profit & Loss:

NII grew 28% YoY and 9% QoQ, Other income grew 66% YoY and 38% QoQ
Core PPoP* grew 11% YoY and 13% QoQ to Rs. 316 Crs
Core PPoP* to assets expanded to 3.79% for the quarter
Highest ever PAT at Rs. 190 Crs for Q4FY23, growth of 59% YoY and 12% QoQ

*Core PPoP – PPoP excluding income from the sale to ARC

4. Asset Quality & Provisions:

Annualized gross slippages at 3.06% for Q4FY23 as compared to 5.03% in Q3FY23 and 8.30% in Q4FY22
GNPA improved by 147bps YoY to 2.60% in Q4FY23 as compared to 3.46% in Q3FY23 and 4.06% in Q4FY22
NNPA improved by 123bps YoY to 1.14% in Q4FY23 as compared to 1.73% in Q3FY23 and 2.37% in Q4FY22
In order to strengthen PCR, Bank has made additional provisions of Rs. 90 Crs during the quarter, PCR improved to 56.90% from 50.84% in Q3FY23 and 42.73% in Q4FY22

Commenting on the quarterly performance, Mr. P N Vasudevan, Managing Director and CEO of Equitas Small Finance Bank said: “During the Bank’s initial years, the focus was on laying the foundation to transition from an NBFC into a Bank. The Bank is in its second phase of growth and the overarching strategy is to leverage the investments made in branches, people, systems, products, and most importantly customers. Initiatives centered on these investments will drive operational efficiencies, customer retention and improve the overall profitability of the Bank. As a stable, sustainable, and scalable bank, Equitas is well positioned to capitalise on industry growth potential.”