Money & Banking
Surabhi | Mumbai |
Equitas SFB chief is upbeat on advances growth in FY23
The merger of Equity Holdings Ltd with Equitas Small Finance Bank should be completed by March 2023, after which the lender will consider applying for a universal bank license.
“We have got RBI approval. We are awaiting SEBI’s approval, and then from the NCLT and shareholders. I think by March 2023 we are hoping to complete it,” said, PN Vasudevan, Managing Director and CEO of Equitas SFB.
The bank had, on May 6, said it has received no objection from the Reserve Bank of India for the merger of Equitas Holdings Ltd with Equitas SFB, based on certain conditions, including the divestment of shareholding by EHL in its subsidiary — Equitas Technologies — prior to the scheme taking effect.
In an interaction with BusinessLine, Vasudevan said, the Equitas Holdings has recently disclosed identifying a buyer for Equitas Technologies P Ltd.
“We are hoping that the divestment will be completed shortly,” he said.
The bank will also seek approval from the RBI for bringing Equitas Development Initiatives Trust (EDIT) and Equitas Healthcare Foundation (EHF) under its ambit before the scheme takes effect.
“We will apply for that shortly,” Vasudevan said.
No change in management
The amalgamation will improve the efficiency and focus of the bank, he said, adding that there will be no change in management.
“The holding company is only holding the bank’s shares and it has no business activity. It does not have too many staff and they will be absorbed into the bank,” he explained.
Vasudevan also said that the bank will wait for completion of merger, and then look at applying for universal bank licence, which could possibly be sometime next year.
Equitas SFB remains upbeat about business prospects and expects a 30 per cent growth in advances this fiscal.
The bank reported a 6.2 per cent growth in its Q4 net profit to ₹120 crore during the last fiscal from ₹113 crore in the same period a year ago. Its Q4FY22 advances grew 15 per cent year-on-year to ₹20,597 crore.
The credit cost this fiscal should be about 1.5 per cent, which should release more profitability to the bank, Vasudevan said.
The bank intends to reduce its gross non-performing assets to less than 3 per cent of gross advances, Vasudevan said, but he did not give a timeframe for it.