Q2 2025 Equitas Small Finance Bank Ltd Earnings Call Transcript
Key Points
- Equitas Small Finance Bank Ltd (BOM:543243) reported strong growth in retail deposits, with 74% of deposits being retail, indicating a healthy momentum in deposit mobilization.
- The bank's investments in technology infrastructure, including PRM, Super app, and customer app for borrowers, have progressed well, enhancing operational efficiency.
- The small business loan segment continues to perform well, with robust disbursements and a focus on micro LAP showing positive results.
- Vehicle Finance is recovering, with improved collections and disbursements in used commercial vehicle and used car loans reaching the highest levels during the second quarter.
- The bank's treasury desk has contributed positively, actively participating across asset classes and taking advantage of market opportunities.
- The microfinance portfolio is under stress, with elevated fresh slippage and flow from SMA-01 and 2, requiring additional provisions and strategic interventions.
- Operating expenditure increased by 14% over the last year, with cost to income rising to 66.09% from 64.37%, indicating pressure on operational efficiency.
- The yield on advances remained flat year-on-year due to a slowdown in microfinance, impacting overall profitability.
- The bank's credit cost for the microfinance portfolio is significantly high at 10%, affecting overall financial performance.
- The attendance at microfinance center meetings has decreased post-COVID, impacting group cohesiveness and repayment behavior.
Ladies and gentlemen, good evening, and welcome to the earnings call of Equitas Small Finance Bank Limited financial performance for Q2 FY25. We have with us today Mr. P. N. Vasudevan, MD and CEO; Mr. Sridharan N., CFO; Mr. Murali Vaidyanathan, Senior President and Country Head, Branch Banking, Liabilities, Product and Wealth; Mr. Rohit Phadke, Senior President and Head Assets; Mr. Natarajan M., President and Head Treasury; and Mr. Dheeraj Mohan, Head, Strategy and IR.
(Operator Instructions) Please note that this conference is being recorded. I'd now like to hand the conference over to Mr. P. N. Vasudevan. Thank you, and over to you, sir.
Good evening to all of you and thank you for logging in today. The first six months of the financial has been quite turbulent as we witnessed deterioration in the microfinance portfolio at an industry level. Before we discuss in detail about how the portfolio has behaved and steps the bank has taken
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