Fino Payments Bank posted a net loss of ₹20.9 crore for the September 2026 quarter, impacted by a 24% decline in other income. While net interest income grew 20% and loan disbursements saw a strong uptick, the bank is facing short-term cost pressures. Investors are focused on the firm's strategic transition into a Small Finance Bank, which requires significant spending on infrastructure, technology, and senior hiring.
Fino Payments Bank reported a net loss of ₹20.9 crore for the quarter ended September 2026, marking a shift from the ₹15.4 crore profit it earned during the same period last year. This dip in profitability was primarily driven by a 24% year-over-year contraction in other income, which fell to ₹259 crore compared to ₹340 crore previously.
Core Banking Growth
Despite the pressure on the bottom line, the bank's core banking operations demonstrated growth. Net interest income, which is the difference between interest earned from loans and interest paid on deposits, increased by 20% to reach ₹39 crore. The bank also continued to build its customer deposit base, which grew 10% to touch ₹2,299 crore by the end of September 2026. Investment activity also saw significant momentum, with the portfolio rising 65% to ₹3,925 crore.
Loan Business Momentum
The bank is actively focusing on its referral loan business, which has emerged as a major growth driver. This segment saw a 286% increase year-over-year, reaching ₹762 crore for the quarter. Total loan disbursals for the first half of the current fiscal year have already reached ₹1,390 crore, effectively surpassing the total volume achieved in the entire previous fiscal year. This aggressive push into lending is a key component of the company's strategy to scale operations.
Small Finance Bank Transition
The bank is currently in the midst of a critical transition to become a Small Finance Bank. This process involves significant upfront expenditure, as the company must upgrade its technology, enhance infrastructure, and restructure its risk and governance frameworks to align with stricter regulatory standards. As part of this preparation, the bank has been onboarding new senior leadership across departments like liabilities, MSME banking, and credit risk.
To manage its cash flow during this transformation phase, the bank has been focusing on cost efficiency, successfully reducing its operating and employee expenses by 9% year-over-year to ₹319 crore. For investors, the most important monitorable remains the progress of this regulatory transition. The future financial performance will depend on the bank's ability to balance these increased operational costs with the sustainability of its loan and deposit growth as it moves toward the full-scale Small Finance Bank model.