Chennai: ESAF Small Finance Bank Limited, one of the leading small finance banks in India in terms of yield on advances, AUM growth rate and share of retail deposits (Source: CRISIL Research Report), has posted a 41.09% jump in net profit to Rs 130.42 cr for the half-year ended 30 September 2020, as against Rs.92.44. crore posted in the same period last year.
Commenting on the results, K. Paul Thomas, Managing Director and CEO of ESAF Small Finance Bank, said “The bank has performed well during the period and I believe the results show that the micro-entrepreneurs are in a recovery mode after the COVID-19 pandemic induced slow down, indicating a positive sign for the economy altogether.”
The total business during the period increased by 35.06% to Rs.15,582 cr. The deposits increase by 35.38% to Rs 8208 cr and advances increased by 34.70% to Rs 7374 cr. Gross NPAs as a percentage of gross advances decreased from 1.76% as at 30 September 2019 to 1.32% as at 30 September 2020 and net NPAs as a percentage of net advances reduced from 0.62% as at 30 September 2019 to 0.19% as at 30 September 2020. The provision coverage ratio improved to 93.45% as at 30 September 2020 from 81.53% as at 30 September 2019. The CRAR was 24.29% with Tier I CRAR of 21.10% as at 30 September 2020, as against a regulatory requirement of 15% and 7.50%, respectively.
On the impact of COVID-19, K. Paul Thomas said “The bank’s customers have shown immense resilience in the face of adversity. I believe the bank has taken suitable steps and sufficient safeguards to support the customers to tide over the crisis and bring them back to normalcy”. He also expressed his gratitude for the hard work and commitment of the employees in the face of the pandemic.
The bank opened 29 branches during the half-year ended 30 September 2020, giving it a total of 483 branches across 19 states and two Union Territories.
Highlights of the Results
(Rs. in crores, except percentages)
|As at and for the half-year ended 30 September 2020||As at and for the half-year ended 30 September 2019||Growth (Cr)||Growth %|
|Net Interest Income||485.91||365.95||119.96||32.78%|
|As at and for the half-year ended 30 September 2020||As at and for the half-year ended 30 September 2019|
|Return on Assets (Annualised)||2.47%||2.31%|
|EPS in Rs.||3.05||2.16|
|Provision Coverage Ratio||93.45%||81.53%|
ESAF Small Finance Bank Limited (the “Bank”) is proposing, subject to applicable statutory and regulatory requirements, receipt of requisite approvals, market conditions and other considerations, to make an initial public offer of its Equity Shares and has filed a draft red herring prospectus (“DRHP”) with the Securities and Exchange Board of India. The DRHP is available on the website of the SEBI at www.sebi.gov.in, as well as on the websites of the book running lead managers, Axis Capital Limited, Edelweiss Financial Services Limited, IIFL Securities Limited and ICICI Securities Limited, at www.axiscapital.co.in, www.edelweissfin.com, www.iiflcap.com and www.icicisecurities.com respectively, and the websites of the stock exchange(s) at www.bseindia.com and www.nseindia.com respectively. Any potential investor should note that investment in equity shares involves a high degree of risk and for details relating to such risk, see “Risk Factors” of the Red Herring Prospectus/ Prospectus, when available. Potential investors should not rely on the DRHP for any investment decision.
This press release does not constitute an offer of Equity Shares for sale in any jurisdiction, including the United States, and the Equity Shares may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended, or an exemption from registration. Any public offering of Equity Shares to be made in the United States will be made by means of a prospectus that may be obtained from the Bank and that will contain detailed information about the Bank and its management, as well as financial statements. However, no public offering of Equity Shares is being made in the United States.
About ESAF Small Finance Bank
We are one of the leading small finance banks in terms of yield on advances, AUM growth rate and share of retail deposits. (Source: CRISIL Research Report). Along with our Promoters, we have a history of more than 25 years of primarily serving the unserved and underserved, with a focus on financial inclusion. Our business model focuses on the principles of responsible banking, providing customer-centric products and services through the extensive application of technology
We follow a social business strategy with a triple bottom line approach, emphasising people, the planet and prosperity. Our goal is to become one of India’s leading banks in the microfinance sector that offers equal opportunities through universal financial access and inclusion and livelihood and economic development. Our goal is to become one of India’s leading banks in the microfinance sector that offers equal opportunities through universal financial access and inclusion and livelihood and economic development. We can trace our roots back to 1992, when Kadambelil Paul Thomas, our Managing Director and Chief Executive Officer, along with others, founded ESAF Society, a society focused on the development of microenterprises, community development, and community health development. ESAF Society started its microfinance activities in 1995. In 2006, Kadambelil Paul Thomas along with others acquired our Corporate Promoter. Thereafter, ESAF Society transferred its microfinance business undertaking to our Corporate Promoter in 2008 pursuant to a business transfer agreement dated March 31, 2008. Our Corporate Promoter was awarded NBFC-MFI status in 2014. Our Corporate Promoter transferred its business undertaking, comprising its lending and financing business, to our Bank on March 10, 2017 pursuant to a Business Transfer Agreement dated February 22, 2017. We commenced our business as a small finance bank on March 10, 2017.