ESAF Small Finance Bank shares fall after asset quality worsens

The company said it posted 18.4% year-on-year (YoY) rise in its net interest income from ₹498.9 crore in Q4FY23 to ₹590.8 in Q4FY24.

However, profit after tax (PAT) fell from ₹43 crore in Q4FY24 from ₹101 crore in Q4FY23, witnessing a fall of over 57%.

This was partly because of an increase in the operating expense, which grew 21.8% on a YoY basis. In addition, the bank also allocated higher provisions at ₹226.2 crore. The bank’s provisions have grown from ₹137.8 crore quarter-on-quarter (QoQ) and ₹82.3 crore YoY.

The bank saw an increase in non-performing assets (NPA): In Q4FY24, gross NPA was reported at 4.8% compared to 2.5% in Q4FY23. The net NPAs also increased on a (QoQ) basis. The net NPA for Q4FY24 stood at 2.26% in comparison to 2.19% in the previous quarter.

The SFB said it witnessed a surge in the overall business as assets under management grew 27.5% on a YoY basis increasing to ₹39,527 in Q4FY24 crore from ₹30,997 crore in Q4FY23.

Additionally, the board of directors also recommended a 7% dividend.

MD and CEO of ESAF Small Finance Bank K Paul Thomas said the bank saw satisfactory growth during the financial year. He added that the bank is focusing on technological advancements to improve the customer experience and operational efficiency.