ESAF Small Finance Bank has released its Q1 FY ’26 earnings call transcript. The transcript provides an overview of the bank’s performance during the first quarter of the fiscal year 2026.
The bank reported a significant increase in its net profit, which grew by 27% year-over-year (YoY) to ₹105.6 crore. This growth was driven by a robust increase in net interest income (NII), which rose by 34% YoY to ₹533.8 crore. The bank’s net interest margin (NIM) also improved to 7.83% from 7.53% in the corresponding quarter of the previous year.
The bank’s total deposits grew by 24% YoY to ₹20,351.6 crore, while its gross advances increased by 26% YoY to ₹23,521.9 crore. The bank’s gross non-performing assets (GNPA) ratio declined to 4.17% from 5.12% in the corresponding quarter of the previous year, indicating a improvement in the bank’s asset quality.
The bank’s capital adequacy ratio (CAR) stood at 21.61%, which is significantly higher than the regulatory requirement of 15%. This provides a cushion for the bank to absorb any potential losses and also provides room for growth.
The bank’s managing director and CEO, stated that the bank is focused on maintaining a strong balance sheet and improving its operational efficiency. The bank is also working on expanding its digital offerings and improving its customer engagement.
Overall, ESAF Small Finance Bank’s Q1 FY ’26 earnings call transcript suggests that the bank is on a strong growth trajectory, driven by a robust increase in net interest income and a improvement in asset quality. The bank’s strong capital adequacy ratio and focus on operational efficiency also provide a positive outlook for the future.
The bank’s performance is also a testament to the growing importance of small finance banks in the Indian banking sector. Small finance banks have been playing a crucial role in providing financial services to the unbanked and underbanked populations in India, and ESAF Small Finance Bank is one of the leading players in this segment.
In terms of future outlook, the bank is expected to continue its growth trajectory, driven by a strong demand for financial services in India. The bank’s focus on digitalization and customer engagement is also expected to drive growth and improve operational efficiency. However, the bank will need to continue to monitor its asset quality and maintain a strong balance sheet to ensure sustainable growth.