KOCHI, May 2: ESAF Small Finance Bank has reported a sharp turnaround in its financial performance for the fourth quarter of FY26, registering a 166.1 per cent year-on-year growth in pre-provisioning operating profit, driven by strong expansion in its MARG portfolio and improved asset quality.
The bank posted a net profit of Rs 24 crore during Q4 FY26, compared to a loss of Rs 183 crore in the corresponding quarter last year and a profit of Rs 7 crore in the preceding quarter, signalling a steady recovery in earnings.
A major contributor to the improved performance was the robust growth in the MARG segment-comprising MSME, agriculture, retail and gold loans-which grew 72 per cent year-on-year. The strategy reflects the bank’s calibrated shift from unsecured lending to a more secured and sustainable portfolio.
Total business stood at Rs 48,276 crore as of March 31, 2026, marking a 14.8 per cent year-on-year growth. Gross advances rose 19.4 per cent to Rs 22,426 crore, while deposits increased 11.1 per cent to Rs 25,850 crore.
Secured loan disbursements surged 73.8 per cent to Rs 10,134 crore during the quarter, with secured assets now accounting for 61 per cent of gross advances, up from 53 per cent a year ago. Gold loans continued to be a key growth driver, expanding 54.5 per cent year-on-year to Rs 8,858 crore.
In line with its de-risking strategy, the microfinance portfolio saw a marginal decline to Rs8,746 crore, with its share in gross advances reducing from 47 per cent to 39 per cent.
Net Interest Income rose to Rs 518 crore from Rs 434 crore in the previous quarter, while Net Interest Margin improved to 6.4 per cent. Other income increased 39.2 per cent year-on-year to Rs 201 crore.
Asset quality showed notable improvement, with Gross NPA declining to 5.4 per cent from 5.6 per cent in the previous quarter, and Net NPA falling to 1.8 per cent from 2.7 per cent. The bank made provisions of Rs 214 crore towards stressed assets.
The Capital to Risk-Weighted Assets Ratio (CRAR) remained strong at 22.2 per cent, while the cost of funds stood at 7.1 per cent.
On the liabilities side, retail deposits grew 9.4 per cent to Rs 23,674 crore, accounting for 92 per cent of total deposits. CASA balances rose to Rs 6,181 crore, with a CASA ratio of 23.9 per cent.
The bank added around 2.3 lakh customers during the quarter, taking its total customer base to over 102 lakh. It also expanded its network with the addition of 16 new branches during FY26.
Managing Director and CEO K. Paul Thomas said the results reflect strengthening business fundamentals, supported by improved profitability and asset quality, and expressed confidence in sustaining growth momentum through a secured and diversified portfolio strategy.
(UNI)
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