Q4 2025 Equitas Small Finance Bank Ltd Earnings Call Transcript
Key Points
- The bank's non-Microfinance advances grew by 19% for the year, indicating strong performance outside the Microfinance sector.
- Collection efficiencies in Microfinance have returned to near normal, with expected credit costs anticipated to settle down to normal levels by the third quarter of FY26.
- Small business loans, used cars, and used commercial vehicle finance continue to grow profitably with credit costs under control.
- The bank's yield on advances remained steady at around 16.3% despite a reduction in the Microfinance book.
- The bank's total treasury income for the year grew by 36%, indicating strong performance in treasury operations.
- Credit costs in the Microfinance portfolio increased significantly from 2.3% in FY24 to 11.37% in FY25, wiping away about INR630 crore of profit.
- The bank's return on assets (ROA) was unimpressive at 0.32% for FY25 due to high credit costs and lower income.
- Net interest margins (NIMs) decreased from 8.36% to 7.51% for the year, largely due to changes in the loan book mix.
- Operating expenditure for the year increased by 15% due to investments in technology, people, and new products.
- The bank's cost-to-income ratio increased to 67.64% from 63.74% last year, indicating higher operational costs relative to income.
Ladies and gentlemen, good day, and welcome to the earnings conference call of Equitas Small Finance Bank Limited's financial performance for Q4 FY25. We have with us today Mr. P N Vasudevan, MD and CEO; Mr. Balaji Nuthalapadi, Executive Director, Technology and Operations; 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. Jagdesh J, Head of Assets; Mr. Natarajan M, President and Head of Treasury; Mr. Dheeraj Mohan, Head, Strategy. (Operator Instructions)
Please note that this conference is being recorded. I now hand this conference over to Mr. P N Vasudevan. Thank you, and over to you, Mr. Vasudevan.
Thank you. Good afternoon to all of you and thank you for taking the time out to dial in to our investor call. The last financial year '25 opened with no indication of what was coming. The first quarter
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