Equitas Small Finance Bank achieved a remarkable financial turnaround in the June 2026 quarter, posting a standalone net profit of ₹184 crore compared to a net loss of ₹224 crore in the corresponding quarter of the previous year. According to the company's quarterly earnings announcement, this represents a complete reversal of the bank's financial performance, marking a significant milestone in the institution's operational recovery. The profitability was primarily driven by a dramatic reduction in provisions to ₹161 crore from ₹612 crore in Q1FY26, allowing the bank to convert a significant net loss into a healthy profit. As per The Economic Times, managing director PN Vasudevan explained that the bank had frontloaded provisions in the first quarter last year when the microfinance crisis peaked, making the current quarter's performance an outlier. The bank also announced key leadership changes, appointing Mukund Shyamrao Barsagade as Chief Financial Officer and Taraka Ramana Prathipati as Interim Chief Risk Officer, both effective July 1, 2026.
The bank demonstrated exceptional business growth with gross advances rising 27% year-on-year to ₹47,641 crore in Q1 FY27, up from ₹37,610 crore in the same period last year. Total deposits climbed 10.44% year-on-year to ₹48,976 crore compared to ₹44,345 crore in the year-ago quarter, indicating strong customer confidence and franchise expansion. Overall disbursements stood at ₹6,784 crore in Q1, representing a 93% year-on-year growth, while Cost of funds reduced by 44 basis points to 7.05% in Q1FY27. Gross advances grew by 27% year-on-year and 3% quarter-on-quarter, with the flagship Small Business Loans (SBL) portfolio growing 15% year-on-year. Net Interest Income surged 30.9% year-on-year to ₹1,960.40 crore from ₹1,648.86 crore in the previous year, while Net Interest Margin (NIM) stood at 7.24% for the quarter, going up by 87 basis points year-on-year. The Cost to Income ratio improved to 68.38% in Q1FY27 from 70.62% in Q1FY26, though slightly higher than 67.52% in Q4FY26. Pre-provision operating profit for the quarter stood higher at ₹405 crore against ₹315 crore in the year ago period, backed by a rise in total income at ₹2,216 crore from ₹1,941 crore over the same period.
The bank's growth was driven by strong performance across multiple business segments, with gold loan disbursements surging 179% year-on-year, microfinance and micro loans growing 70%, housing finance expanding 24%, and micro and small enterprise finance (MSE) loans increasing 28%. Small business loans, the bank's flagship product, grew 15% year-on-year, maintaining its position as a key growth driver. The bank's FCNR deposit facility has crossed $42 million, launched in July 2025 alongside Equitas Explorer Savings Account for NRIs and Persons of Indian Origin working in foreign shipping companies, merchant navy, and oil rigs. This diversified growth strategy across gold loans, microfinance, housing finance, and enterprise lending segments has contributed significantly to the bank's overall business expansion.
The bank's asset quality showed sequential improvement during the quarter, with Gross Non-Performing Assets (GNPA) ratio declining to 2.42% as of June-end from 2.92% a year prior, representing a significant improvement from 2.49% in Q4FY26. Including the securitization book, GNPA stood at 2.31%. Net NPA ratio increased slightly by 2 basis points to 0.70% from 0.68% in the previous quarter. The Provision Coverage Ratio (PCR) remained stable at 71.02%, or 86.96% including technical write-offs. The bank reported Gross NPAs at ₹1,100.39 crore and Net NPAs at ₹318.94 crore as of June 30, 2026. Net slippages were recorded at 1.43%, the second-lowest among first quarters over the last five years. The bank's assets under management grew 27% year-on-year to ₹47,641 crore, indicating strong portfolio expansion and operational efficiency.
The bank maintained a strong capital position with Capital Adequacy Ratio (Basel-II) at 19.44%, with Tier I capital at 16.01% and Tier II at 3.43%. Return on Assets (ROA) and Return on Equity (ROE) for Q1FY27 stood at 1.18% and 11.76%, respectively. Earnings per share (basic and diluted) were ₹1.61 for the quarter ended June 30, 2026, a significant improvement from the negative ₹1.96 recorded in the year-ago period. The bank's net worth stood at ₹6,367 crore as of June 30, 2026. Deposits grew by 10% year-on-year and 5% quarter-on-quarter, with the Current Account Savings Account (CASA) ratio holding steady at 25%. The Liquidity Coverage Ratio (LCR) as on June 30, 2026, was 178.46%, well above regulatory thresholds. In a significant development, the Reserve Bank of India approved Mirae Asset Mutual Fund to purchase an aggregate stake of up to 9.50% in the bank in June 2026, providing institutional validation and positive support for the stock.
