ESAF Small Finance Bank reported robust financial performance for Q3FY26 ended December 31, 2025, with total deposits rising 7.10% year-on-year to ₹24,006 crore compared to ₹22,415 crore in the previous year. On a sequential basis, deposits increased 4.86% from ₹22,894 crore as of September 30, 2025. The Thrissur-based private lender also witnessed strong growth in advances, with gross advances increasing 13.06% year-on-year to ₹20,680 crore and growing 8.06% quarter-on-quarter. According to latest reports, disbursements increased significantly by 46.1% quarter-on-quarter, reflecting the bank's enhanced lending activity and strong business momentum.
The bank's CASA deposits demonstrated healthy growth, increasing 7.83% year-on-year to ₹6,030 crore. The CASA ratio improved to 25.12% as of December 31, 2025, from 24.95% in the corresponding period last year, though it declined from 26.41% in the previous quarter. Term deposits stood at ₹17,976 crore, registering a 6.85% year-on-year growth. The improvement in CASA ratio indicates the bank's success in mobilizing low-cost funds despite the sequential decline, enhancing its cost of funds management capabilities.
The bank's loan portfolio composition showed significant shifts during the quarter, reflecting a strategic transformation toward secured lending. Micro-loans declined 24.16% year-on-year to ₹7,583 crore, while retail and other loans surged 57.95% year-on-year to ₹13,097 crore. Notably, secured advances constituted 63.33% of gross advances as of December 31, 2025, compared to 45.33% a year earlier. These secured advances include gold loans, mortgage, mobility, MSME and agriculture loans, reflecting the bank's strategic shift toward secured lending to improve asset quality and reduce risk exposure while maintaining growth momentum.
ESAF Small Finance Bank undertook significant asset quality improvement measures during 2025. The bank completed technical write-offs and sales of non-performing assets amounting to ₹1,364 crore during the 2025 calendar year. During the quarter specifically, the bank completed transactions involving the sale of NPAs worth ₹1,693.65 crore to asset reconstruction companies for a total consideration of ₹183.18 crore. The bank noted that without these proactive asset quality management actions, year-on-year growth in advances would have been 20.52%, and quarter-on-quarter growth would have been 11.05%, demonstrating the substantial impact of these strategic measures.
The bank's customer base reached 99.85 lakh as of December 31, 2025, with 5.71 lakh new customers added during the year. Its distribution network comprised 788 branches, 720 ATMs and 1,045 customer service centres across 24 states and two union territories. In a leadership development, the bank appointed Karthikeyan Manickam as its new part-time chairman following the retirement of Ravimohan Periyakavil Ramakrishnan after completing two consecutive terms. Shares of ESAF Small Finance Bank ended at ₹26.85, up by ₹0.080, or 0.30% on the BSE, reflecting positive market sentiment toward the bank's operational performance.
