Equitas Small Finance Bank returned to profitability with a ₹183 crore net profit for the June 2026 quarter, recovering from a loss of ₹223 crore a year ago. The turnaround was driven by a 27% increase in total advances, led by a 179% surge in gold loans and strong growth in microfinance, while asset quality also showed sequential improvement.
Detailed Coverage
Equitas Small Finance Bank has reported a net profit of ₹183 crore for the first quarter of the 2027 fiscal year. This performance marks a notable recovery compared to the same period last year, when the lender recorded a loss of ₹223 crore. The turnaround reflects higher business activity, with the bank's total gross advances rising 27% compared to the previous year.
Growth in Loan Segments
The bank’s lending growth was heavily supported by a 179% year-on-year increase in its gold loan portfolio. Other segments also showed significant activity, with microfinance and micro-loans growing by 70%, micro and small enterprise loans rising by 28%, and housing finance expanding by 24%. Total loan disbursements for the quarter reached ₹6,784 crore, marking a 93% increase compared to the same period in the prior year. The bank’s core small business loan segment also maintained growth, rising 15%.
Funding Costs and Margins
Equitas Small Finance Bank improved its operational efficiency during the quarter as total deposits grew by 10% year-on-year. The bank successfully reduced its cost of funds to 7.05%, down 44 basis points compared to the previous year. This improvement, alongside other factors, helped the bank report a Net Interest Margin (NIM) of 7.24%, an increase of 87 basis points year-on-year. The NIM is a key metric that shows how much profit a bank makes from its interest-earning activities after accounting for interest expenses.
Asset Quality Trends
The bank’s asset quality, which measures the health of its loan book by tracking overdue payments, showed improvement. Gross Non-Performing Assets (GNPA) stood at 2.36% for the first quarter, reflecting a 13 basis point decrease from the previous quarter. Similarly, Net Non-Performing Assets (NNPA), which represent the remaining bad loans after specific provisions are made, fell to 0.70%, a sequential reduction of 2 basis points.
Strategic Appointments and International Deposits
Beyond its core lending performance, the bank reported progress in its international banking segment. Its FCNR deposit facility, launched in July 2025 for non-resident Indians and professionals in the shipping and oil sectors, has accumulated over $42 million. The bank also recently updated its leadership team, with Mukund Shyamrao Barsagade taking over as Chief Financial Officer and Taraka Ramana Prathipati serving as the Interim Chief Risk Officer, both effective from July 1, 2026. For investors, the key monitorables moving forward will be the sustainability of the 7.24% margin and the bank's ability to maintain downward pressure on its non-performing assets as it continues to scale its gold and micro-lending portfolios.