Equitas Small Finance Bank (EQUITASBNK) Q4 20/21 earnings summary

Executive summary

• FY21 performance strengthened despite COVID-19 disruption: PAT rose 57.70% YoY to ₹384.22 crore; advances grew 16.64% and deposits 51.94%.

• Collections returned close to pre-pandemic levels by March 2021; full-year credit cost was 2.26%, while a second COVID-19 wave made the near-term outlook uncertain.

Financial highlights

• Net interest income rose 20.24% YoY to ₹1,797.96 crore; non-interest income increased 48.06% to ₹418.05 crore, lifting operating revenue to ₹2,216.01 crore.

• Operating expenses increased to ₹1,329.43 crore from ₹1,180.08 crore; operating profit rose to ₹886.58 crore from ₹597.58 crore.

• Provisions and contingencies were ₹375.32 crore versus ₹246.64 crore; PBT grew 45.68% to ₹511.26 crore and PAT rose to ₹384.22 crore from ₹243.64 crore.

• Balance-sheet assets increased to ₹24,715.22 crore from ₹19,295.55 crore; gross advances reached ₹17,924.56 crore and deposits ₹16,391.97 crore at March 31, 2021.

Outlook and guidance

• Growth outlook rests on reopening and cash-flow recovery among micro and small enterprises; management expected growth and asset quality to be sustained while continuing financial-inclusion lending.

• FY22 priorities include digital technology, collaborations, product diversification and stronger liabilities; conservative underwriting and prompt action on emerging stress remain priorities.

• The outlook remained uncertain amid the second COVID-19 wave, localized lockdowns and risk of delayed normalization; actual results could diverge due to pandemic, regulatory, credit and market risks.