Equitas Small Finance Bank's Q2 net profit more than doubles to ₹103 cr

  • Net interest income rises 32% to ₹461 crore as against ₹351 crore in Sept 2019
  • The small finance bank got listed on capital markets last week

Equitas Small Finance Bank on Monday reported its net profit more than doubled to ₹103 crore for the quarter ending 30 September, 2020. It was ₹49 crore in the year-ago period.

The bank said disbursements during the quarter were at 80% of Q2FY20.

Net interest income rises 32% to ₹461 crore as against ₹351 crore in September 2019.

The bank made additional Covid provision of ₹26 crore in Q2FY21. “The bank now carries Rs. 170.63 Cr of COVID-19 related provisions (other than standard and NPA provisions), which constitutes 1.02% of total Gross Advances,” the bank said in a release.

On Monday, the bank’s scrip on BSE closed 0.76% lower at ₹32.65.

“Complying with the Small Finance Bank licensing requirement, the bank got listed,” Equitas SFB said in a release.

The lender’s total income grew 22.4 per cent to ₹861.23 crore during the reported quarter as against ₹703.39 crore in the year-ago period.
Provisions for bad loans and contingencies nearly doubled to ₹84 crore from ₹45.4 crore a year ago.

Equitas SFB’s gross non-performing assets (NPAs) fell to 2.48 per cent of the gross advances at the end of September 2020 from 2.88 per cent a year ago.

In value terms, gross NPAs or bad loans stood at ₹399.65 crore, higher than ₹377.22 crore a year ago.

Net NPAs also fell to 1.03 per cent ( ₹199 crore) during the quarter from 1.63 per cent ( ₹231 crore) a year ago.

The bank said its gross and net NPAs would have been at 2.76 per cent and 1.40 per cent, respectively, but for the Supreme Court order of September directing banks that accounts which were not declared NPA till August 31, 2020 shall not be declared as NPA till further orders.

Pending disposal of the case, the bank, as a matter of prudence has, in respect of these accounts, made a contingent provision (including on interest accrued) of ₹15.43 crore, which is included in provisions (other than tax) and contingencies, it said.

The lender’s advances as of September 30, 2020 grew 26 per cent year-on-year to ₹16,731 crore.

The cost to income ratio improved to 58.15 per cent during the quarter from 68.35 per cent a year ago and 67.27 per cent in June 2020 quarter.

Total CRAR (capital to risk weighted assets ratio) stood at 20.93 per cent, well above the minimum regulatory requirement of 15 per cent, it said.

The lender said it availed refinance of ₹1,100 crore during the quarter ( ₹685 crore in Q1FY21) and has adequate advances to avail fresh refinance whenever required, which provides strong cushion to its ALM (asset liability management) position.

Liquidity Coverage Ratio (LCR) for the quarter at 126 per cent was much above the minimum regulatory requirement of LCR at 80 per cent, it said.

The bank’s shares debuted with a 6 per cent discount on November 2 against its issue price of ₹33 apiece.