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Equitas Small Finance Bank has reported 57% growth in net profit at Rs 170.13 crore for
the quarter ended December 2022 (Q3FY2023). The bank has posted healthy 20% growth
in net interest income (NII), while the core fee income of the bank also
improved 70% in Q3FY2023. The Net Interest Margin (NIM) of the bank was healthy
at 9.01% in Q3FY2023 compared to 9.10% in the corresponding quarter of previous
year.
On business front, the bank as has posted 29% growth in
business with strong 27% surge in loan book. The asset quality of the bank improved
in Q3FY2023. Bank has reduced the credit to deposit ratio to 106.5% at end
December 2022 from 110.1% at end December 2021. The CASA ratio of the bank was healthy
at 46.2% at end December 2022 from 50.8% at end December 2021.
Asset quality improves: The
bank has maintained stable asset quality in Q3FY2023.
The fresh slippages of loans stood at Rs 286 crore in
Q3FY2023 compared with 314 crore in previous quarter and Rs 267 crore in the
corresponding quarter last year.
The recoveries of NPAs stood at Rs 69.37 crore, upgradations
at Rs 144.81 crore and the write-off of loans was at Rs 53.47 crore in
Q3FY2023.
DPD
buckets have normalized as covid impact wanes off and restructured book
contracts. 1-90 DPD stands at 7.53% in Q3FY23 as compared to 10.43% in March’22
and 5.51% in March’20 (Pre-Covid’19)
Bank
has utilized Rs 36 crore of Covid Restructured Loan (RL) standard provisions
during the quarter and continues to hold Rs 60 crore in Standard RL provisions
which may be utilized in the following quarters.
In
order to strengthen PCR, the Bank made additional provisions of Rs 27 crore
towards Covid Restructured retail LAP loans that have become NPA.
Provision coverage ratio improved to 50.84% at end December
2022 compared to 50.49% a quarter ago and 46.81% a year ago.
The capital adequacy ratio of the bank stood at 24.3% with
Tier I ratio at 23.7% at end December 2022.
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Asset Quality
Indicators: Equitas Small Finance Bank
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|
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Dec-22
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Sep-22
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Jun-22
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Mar-22
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Dec-21
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Variation
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QoQ
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YTD
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YoY
|
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Gross NPA (Rs Crore)
|
861.36
|
870.26
|
856.00
|
837.18
|
863.82
|
-1
|
3
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0
|
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Net NPA (Rs Crore)
|
423.44
|
430.88
|
441.22
|
479.48
|
459.42
|
-2
|
-12
|
-8
|
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% Gross NPA
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3.63
|
3.91
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4.10
|
4.24
|
4.39
|
-28
|
-61
|
-76
|
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% Net NPA
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1.82
|
1.97
|
2.15
|
2.47
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2.38
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-15
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-65
|
-56
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% PCR
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50.84
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50.49
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48.46
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42.73
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46.81
|
35
|
811
|
403
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% CRAR - Basel III
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24.28
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23.08
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24.62
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25.16
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21.91
|
120
|
-88
|
237
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% CRAR - Tier I -
Basel III
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23.74
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22.55
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24.07
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24.53
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20.66
|
119
|
-79
|
308
|
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Variation in basis
points for figures given in percentages and in % for figures in Rs crore
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Business Highlights:
Strong business growth: The
business of the bank has increased 29% YoY to Rs 48308 crore end December 2022,
driven by 27% surge in advances to Rs 24915 crore. Deposits rose 31% to Rs 23393
crore at end December 2022.
CASA deposits ratio ease: The
CASA deposits of the bank increased 19% YoY to Rs 10817 crore at end December
2022. The CASA ratio declined to 46.2% at end December 2022 compared to 50.8% at
end December 2021, while eased from 48.1% a quarter ago.
The Bank currently maintains surplus
liquidity in the form of High Quality Liquid Assets (HQLA). Liquidity Coverage Ratio
(LCR) is 216% end December 2022.
Strong loan growth: Advances
growth was driven by retail loans rising 41% YoY to Rs 8959 crore at end
December 2022, while credit to microfinance increased 24% to Rs 4600 crore and MSME
18% to Rs 11356 crore at end December 2022.
Investment book of the bank increased 26% YoY to Rs 6181 crore at end
December 2022.
Healthy margins: The
bank has showed 29 bps YoY decline in cost of deposits to 6.61%, while yield on
advances dipped 112 bps YoY to 17.01% in Q3FY2023. The NIM was stable at 9.01%
in Q3FY2023.
Branch expansion: The
bank has added 14 branches and 2 ATMs in Q3FY2023, taking overall tally to 901 branches
and 347 ATM`s end December 2022.
Book value of
the bank stood at Rs 37.0 per share at end December 2022, while the adjusted
book value (net of NNPA and 25% of restructured advances) was Rs 33.2 per share
at end December 2022.
Quarterly Performance
NII rises on strong loan growth: Bank has recorded 18% increase in the interest earned at Rs 1063.39
crore, while interest expenses increased 15% to Rs 415.89 crore in Q3FY2023. NII
improved 20% to Rs 647.50 crore in the quarter ended December 2022.
Healthy growth in the core fee income: Bank has posted strong 70% growth in core fee income to Rs 95
crore, while the treasury income declined -58% to Rs 8 crore. Other income increased
20% to Rs 24 crore, supporting 14% jump in the overall non-interest income to
Rs 152.64 crore in the quarter ended December 2022.
Expenses ratio improves: The
operating expenses of the bank increased 16% to Rs 521.03 crore, as other
expenses moved up 9% to Rs 229.03 crore, while employee expenses increased 21% to
Rs 292 crore in Q3FY2023. Cost to income ratio improved 65.1% in Q3FY2023
compared with 66.7% in Q3FY2022, helping the Operating Profit to increase 24% to
Rs 279.11 crore.
Provisions and contingencies decline: The bank has showed -36% decline in provisions to Rs 49.90 crore.
Effective tax rate declined to 25.8%
in Q3FY2023 from 26.1% in Q3FY2022. Net Profit rose by 57% YoY to Rs 170.13 crore
during quarter ended December 2022.
Financial Performance 9MFY2023:
Bank has posted 138% increase in net profit to Rs 383.55 crore
in the nine months ended December 2022 (9MFY2023). The net interest income
increased 24% to Rs 1837.76 crore, while non-interest income moved up 11% to Rs
430.89 crore, pushing up net total income by 21% to Rs 2268.65 crore in
9MFY2023. The operating expenses increased 15% to Rs 1479.04 crore, while
provision and contingencies galloped -24% to Rs 281.60 crore, allowing profit
before tax to increase 134% to Rs 508.01 crore in 9MFY2023. The cost-to-income
ratio improved to 65.2% in 9MFY2023 compared to 68.6% in 9MFY2022. An effective
tax rate declined to 24.5% in 9MFY2023 compared to 25.8% in 9MFY2022. The net
profit has increased 138% to Rs 383.55 crore in 9MFY2023.
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Equitas Small Finance Bank:
Results
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Particulars
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2212 (3)
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2112 (3)
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Var %
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2212 (9)
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2112 (9)
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Var %
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2203 (12)
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2103 (12)
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Var %
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Interest Earned
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1063.39
|
901.16
|
18
|
3006.15
|
2563.44
|
17
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3459.67
|
3194.41
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8
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Interest Expended
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415.89
|
360.08
|
15
|
1168.39
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1077.76
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8
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1421.13
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1396.45
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2
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Net Interest Income
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647.50
|
541.08
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20
|
1837.76
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1485.68
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24
|
2038.54
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1797.96
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13
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Other Income
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152.64
|
133.85
|
14
|
430.89
|
389.81
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11
|
537.56
|
418.05
|
29
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Net Total Income
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800.14
|
674.93
|
19
|
2268.65
|
1875.49
|
21
|
2576.10
|
2216.01
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16
|
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Operating Expenses
|
521.03
|
450.21
|
16
|
1479.04
|
1287.45
|
15
|
1704.15
|
1329.43
|
28
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Operating Profits
|
279.11
|
224.72
|
24
|
789.61
|
588.04
|
34
|
871.95
|
886.58
|
-2
|
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Provisions &
Contingencies
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49.90
|
78.40
|
-36
|
281.60
|
370.66
|
-24
|
493.84
|
375.32
|
32
|
|
Profit Before Tax
|
229.21
|
146.32
|
57
|
508.01
|
217.38
|
134
|
378.11
|
511.26
|
-26
|
|
Provision for tax
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59.08
|
38.20
|
55
|
124.46
|
56.15
|
122
|
97.38
|
127.04
|
-23
|
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PAT
|
170.13
|
108.12
|
57
|
383.55
|
161.23
|
138
|
280.73
|
384.22
|
-27
|
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EPS*(Rs)
|
5.4
|
3.4
|
|
4.1
|
1.7
|
|
2.2
|
3.1
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Adj BV (Rs)
|
33.2
|
26.5
|
|
33.2
|
26.5
|
|
29.1
|
26.9
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* Annualized on current equity of
Rs 1254.71 crore. Face Value: Rs 10, Figures in Rs crore
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Source: Capitaline Corporate
Database
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