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Esaf Small Finance Bank Q4 net more than doubles to Rs 105.6 cr

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The Q4 numbers have been boosted by a write-back/recovery of impaired assets to the tune of Rs 750 crore during the period, he said.

Esaf Small Finance Bank on Wednesday said that its March quarter net income more than doubled to Rs 105.6 crore, largely on the back of large recoveries/write-backs from impaired assets to the tune of Rs 750 crore, which cushioned the impact of higher amount of bad loans and resultant provisions.

The Kerala-based lender, which has filed for a Rs 997-crore public offer, however, had much lower profit for the full year ending March 2022 at Rs 54.73 crore, impacted by the third wave of the pandemic wherein its key business of microlending was badly hit, the founder and managing director Paul Thomas told PTI.

The numbers would have been much better had it not been for the higher credit cost, he said, as the quantum of its impaired loans rose to Rs 418 crore or 7.83 per cent of the total assets from 6.70 per cent a year ago, while net NPAs rose to Rs 275 crore or 3.92 per cent from 3.88 per cent.

The bank has made an additional provision of Rs 66.06 crore as of March 2022, as against Rs 44.04 crore as of March 2021.
Total business rose 44.36 per cent to Rs 25,156 crore from Rs 17,425 crore in the previous fiscal, boosting its net interest income by 24.47 per cent to Rs 1,147 crore from Rs 922 crore in the previous fiscal.

The bank closed the year with a net interest margin of 8.86 per cent, Thomas added.
The Q4 numbers have been boosted by a write-back/recovery of impaired assets to the tune of Rs 750 crore during the period, he said.
Led by larger demand for small-ticket loans from its bread and butter microloans, gross advances increased by 45.01 per cent to Rs 12,203 crore for the year, compared to Rs 8,415 crore a year ago.

Total deposits rose 42.41 per cent to Rs 12,816 crore from Rs 8,999 crore in March 2021, with savings deposits rising 69.88 per cent and term deposits by 36.35 per cent. Demand deposits and savings bank deposits (Casa) grew 67.60 per cent to Rs 2,927 crore and the Casa ratio rose to 22.85 per cent from 19.41 per cent in March 2021, he said.

Blended collection efficiency improved to 95 per cent after the pandemic curbs eased and the resultant improvement in economic activity.
Thomas said 80 per cent of his business still comes from microloans of which 60 per cent are from his home market of Kerala alone. Overall half the business is from Kerala followed by Tamil Nadu and Maharashtra.

During the year, the bank added 25 branches taking the total count to 575 and another 300 customer service centres being run by banking correspondents, totaling its number to over 570.

In FY23, it will add 50 more branches and around 300 more customer service centres, Thomas said.
On the IPO, he said, the road shows will begin soon. Of the Rs 997-crore issue, Rs 150 crore will be offer-for-sale (OFS) and the rest will be primary issue.

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