Equitas Small Finance Bank Q2 Results: Net Profit Rises 71% On Lower Provisions

Net interest income for the bank rose 25.5% from last year to Rs 766 crore in Q2 FY24.

<div class="paragraphs"><p>A stack of money coin with trading graph. (Photo:&nbsp;Freepik)</p></div>
A stack of money coin with trading graph. (Photo: Freepik)

Equitas Small Finance Bank Ltd. surpassed analysts' estimates, with a 70.6% year-on-year rise in net profit for the quarter ended September.

Net profit for Q2 was at Rs 198 crore, as compared with Rs 116 crore a year ago. Analysts polled by Bloomberg estimated a net profit of Rs 180 crore for the July-September quarter.

Sequentially, the net profit rose 3.6%.

Net interest income, or core income, for the bank increased 25.5% from the same period last year to Rs 766 crore during the quarter. Other income rose 24.8% year-on-year to Rs 181 crore.

Asset quality for the lender improved with gross non-performing asset ratio falling 48 basis points sequentially to 2.27%, as of Sept. 30. Net NPA ratio also improved by 21 basis points quarter-on-quarter to 0.97%.

Gross slippages rose to 3.47%, as compared with 3.07% quarter-on-quarter.

Provisions for the quarter fell 30% from a year ago to Rs 63 crore. The provision coverage ratio stood at 57.72% in Q2.

The CASA ratio fell to 34% year-on-year in Q2, as compared with 48.05%. The cost of funds rose 96 basis points to 7.21% in the quarter ended September, as compared with 6.25% in the same period last year.

The net interest margin fell 33 basis points to 8.43% quarter-on-quarter, from the previous 8.76%.

The bank's deposits stood at Rs 30,839 crore, up 42% year-on-year. Sequentially, they grew 11%.

Gross advances stood at Rs 31,229 crore, up 37% year-on-year. Sequentially, they grew 6%.

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