Fino Payments Bank reported a revenue of Rs 1,587.9 crore for FY26 as it pivots toward a Small Finance Bank model. While profits dipped to Rs 52.5 crore due to migration costs, the bank saw a 28% growth in deposits and successfully completed its core banking transition to Finacle.
Fino Payments Bank Annual Report FY26: SFB Transition Path
Revenue: Rs 1,587.9 Crore; Profit After Tax: Rs 52.5 Crore
Reader Takeaway: Improved margins and deposit growth signal strategic focus, balanced by leadership transition and lower annual profits.
What just happened
Fino Payments Bank has released its FY26 Annual Report, highlighting a year of structural change. The bank received in-principle RBI approval for its conversion into a Small Finance Bank (SFB) in December 2025. Additionally, it completed the migration to the Finacle core banking platform in January 2026. These steps form the foundation of its new strategic direction.
Why this matters
The bank is intentionally moving away from low-margin, transaction-heavy business segments like Domestic Money Transfer (DMT) and Micro-ATM services. This move explains the 14% year-on-year revenue decline to Rs 1,587.9 crore. However, management has prioritized higher-margin, annuity-based income, leading to a 530 basis point improvement in net revenue margins to 36.8%.
Management and Governance
A significant shift occurred in the leadership team with the early retirement of MD & CEO Mr. Rishi Gupta, effective May 21, 2026. Mr. Ketan Merchant has been appointed as the Interim CEO. The board is currently overseeing the leadership transition to ensure stability as the bank progresses toward its SFB launch.
Strategic Developments
Fino Payments Bank has set an ambitious goal to reach an Assets Under Management (AUM) of Rs 8,000 to Rs 10,000 crore by FY30. Lending operations are slated to begin in Q1 FY28. The bank maintains long-term targets of an RoE above 20%, credit costs below 1%, and a cost of funds under 4%.
Risks to watch
Profitability in FY26 was pressured by one-time expenses related to the core banking migration and provisions for labour codes. Investors should closely monitor the interim leadership's ability to maintain operational momentum and the execution of the three-phase roadmap as the bank moves closer to commencing lending activities.
Context metrics
- Average Total Deposits grew 28% YoY to Rs 2,576 crore.
- EBITDA stood at Rs 243.2 crore, a 4% increase over FY25.
What to track next
Watch for updates on the final SFB license operationalization and any announcements regarding the appointment of a permanent CEO.