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Equitas Small Finance Bank has reported 97% growth in net profit at Rs 191.20 crore
for the quarter ended June 2023 (Q1FY2024). The bank has posted healthy 28%
growth in net interest income (NII), while the core fee income of the bank also
improved 36% in Q1FY2024. The Net Interest Margin (NIM) of the bank eased to
8.76% in Q1FY2024 compared to 9.05% in the corresponding quarter of previous
year.
On business front, the bank has posted 36%
growth in business with strong 36% surge in loan book. The asset quality of the
bank was stable in Q1FY2024. The credit to deposit ratio was steady at 106.8%
at end June 2023 from 106.4% at end June 2022. However, the CASA ratio of the
bank has declined to 38.4% at end June 2023 from 51.7% at end June 2022.
Asset quality stable: The bank has maintained stable asset quality in
Q1FY2024.
The fresh slippages of loans stood at Rs 214
crore in Q1FY2024 compared with 191 crore in previous quarter and Rs 296 crore
in the corresponding quarter last year.
The recoveries of NPAs stood at Rs 49.38 crore,
upgradations at Rs 87.38 crore and the write-off of loans was at Rs 30.96 crore
in Q1FY2024.
The standard restructured loan book of the bank net
of provisions dipped to Rs 6 crore end June 2023.
Provision coverage ratio improved to 57.79% at
end June 2023 compared to 56.90% a quarter ago and improved from 48.46% a year
ago. The bank has created extra provisions of Rs 14 crore in Q1FY24 to raise
provision coverage ratio.
The capital adequacy ratio of the bank stood at
22.1% with Tier I ratio at 21.4% at end June 2023.
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Asset Quality
Indicators: Equitas Small Finance Bank
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Jun-23
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Mar-23
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Dec-22
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Sep-22
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Jun-22
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Variation
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QoQ
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YoY
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Gross NPA (Rs Crore)
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770.18
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723.96
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861.36
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870.26
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856.00
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6
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-10
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Net NPA (Rs Crore)
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325.10
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312.02
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423.44
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430.88
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441.22
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4
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-26
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% Gross NPA
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2.75
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2.76
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3.63
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3.91
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4.10
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-1
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-135
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% Net NPA
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1.18
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1.21
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1.82
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1.97
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2.15
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-3
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-97
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% PCR
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57.79
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56.90
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50.84
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50.49
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48.46
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89
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933
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% CRAR - Basel III
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22.06
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23.80
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24.28
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23.08
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24.62
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-174
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-256
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% CRAR - Tier I -
Basel III
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21.36
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23.08
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23.74
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22.55
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24.07
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-172
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-271
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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 36% YoY
to Rs 57310 crore end June 2023, driven by 36% surge in advances to Rs 29601
crore. Deposits moved up 36% to Rs 27709 crore at end June 2023.
CASA deposits ratio declines: The CASA deposits of the bank rose 1% YoY to Rs
10642 crore at end June 2023. The current account deposits increased 23% to Rs
841 crore, while saving account deposits declined 1% to Rs 9801 crore end June
2023. The CASA ratio declined to 38.4% at end June 2023 compared to 51.7% at
end June 2022, while fell from 42.3% a quarter ago. The term deposits have
increased 61% to Rs 17067 crore end June 2023.
The NR deposits grew 45% to Rs 1500 crore from
Rs 1009 crore end June 2022. Saving account and retail deposits now contribute
73% of total deposits. About 95% of bulk deposits are non callable.
Strong loan growth: Advances growth was driven by retail loans
rising 42% YoY to Rs 16543 crore at end June 2023, while credit to MSME
increased 27% to Rs 11880 crore at end June 2023. The credit to NBFC jumped 70%
to Rs 1178 crore end June 2023.
The disbursements of the bank has surged 47% to
Rs 4757 crore in Q1FY24 mainly driven by 56% jump in microfinance, 39% in small
business loans, 31% in vehicle finance, 65% in housing loans etc.
Investment
book of the bank surged 48%
YoY to Rs 7191 crore at end June 2023. The SLR book was at Rs 7148 crore.
Margins ease: The bank has showed 91 bps YoY increase in cost of deposits to
7.45%, while yield on advances eased -2 bps YoY to 17.13% in Q1FY2024. Thus,
the NIM has declined 29 bps YoY to 8.76%.
Branch expansion: The bank has added 5 branches and 3 ATMs in
Q1FY2024, taking overall tally to 927 branches and 352 ATM`s end June 2023.
Book value of the bank stood at Rs 48.2 per share at end June 2023, while the
adjusted book value (net of NNPA and 10% of restructured advances) was Rs 45.2
per share at end June 2023.
Quarterly Performance
NII rises as NIM improves: Bank has recorded 33% increase in the interest
earned at Rs 1253.96 crore, while interest expenses increased 42% to Rs 510.82
crore in Q1FY2024. NII improved 28% to Rs 743.14 crore in the quarter ended
June 2023.
Healthy growth in the core fee income: Bank has posted strong 36% growth in core fee
income to Rs 91 crore, while the treasury income surged 314% to Rs 29 crore,
other income 15% to Rs 30 crore, leading to 29% dip in the overall non-interest
income to Rs 171.37 crore in the quarter ended June 2023.
Expenses ratio rises: The operating expenses of the bank increased 35%
to Rs 602.39 crore, as other expenses moved up 25% to Rs 274.42 crore, while
employee expenses increased 45% to Rs 327.97 crore in Q1FY2024. Cost to income
ratio jumped to 65.9% in Q1FY2024 compared with 62.4% in Q1FY2023. The Operating
Profit increased 16% to Rs 312.12 crore.
Provisions and contingencies decline: The bank has showed -58% decline in provisions
to Rs 60.07 crore.
Effective tax rate rose to 24.1% in Q1FY2024 from 23.4% in Q1FY2023. Net
Profit rose by 97% YoY to Rs 191.20 crore during quarter ended June 2023.
Financial Performance FY2023:
Bank has posted 104% increase in net profit to
Rs 573.60 crore in the year ended March 2023 (FY2023). The net interest income
increased 25% to Rs 2544.73 crore, while non-interest income moved up 25% to Rs
669.59 crore, pushing up net total income by 25% to Rs 3214.32 crore in FY2023.
The operating expenses increased 20% to Rs 2038.31 crore, while provision and
contingencies declined 18% to Rs 407.20 crore, allowing profit before tax to
increase 103% to Rs 768.81 crore in FY2023. The cost-to-income ratio improved
to 63.4% in FY2023 compared to 66.2% in FY2022. An effective tax rate declined
to 25.4% in FY2023 compared to 25.8% in FY2022. The net profit has increased
104% to Rs 573.60 crore in FY2023.
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Equitas Small Finance Bank:
Results
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Particulars
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2306 (3)
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2206 (3)
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Var %
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2303 (12)
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2203 (12)
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Var %
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Interest Earned
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1253.96
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940.40
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33
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4161.88
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3459.67
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20
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Interest Expended
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510.82
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359.82
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42
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1617.15
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1421.13
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14
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Net Interest Income
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743.14
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580.58
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28
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2544.73
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2038.54
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25
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Other Income
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171.37
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133.22
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29
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669.59
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537.56
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25
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Net Total Income
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914.51
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713.80
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28
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3214.32
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2576.10
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25
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Operating Expenses
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602.39
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445.61
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35
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2038.31
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1704.15
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20
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Operating Profits
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312.12
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268.19
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16
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1176.01
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871.95
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35
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Provisions &
Contingencies
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60.07
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141.60
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-58
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407.20
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493.84
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-18
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Profit Before Tax
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252.05
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126.59
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99
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768.81
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378.11
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103
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Provision for tax
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60.85
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29.58
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106
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195.21
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97.38
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100
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PAT
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191.20
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97.01
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97
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573.60
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280.73
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104
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EPS*(Rs)
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6.9
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3.5
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5.2
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2.5
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Adj BV (Rs)
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45.2
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30.4
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43.6
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29.1
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* Annualized on current equity of
Rs 1113.23 crore. Face Value: Rs 10, Figures in Rs crore
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Source: Capitaline Corporate
Database
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