ESAF Small Finance Bank Reports Record Q2 Net Profit of ₹160 Crore

KOCHI : Thrissur-headquartered ESAF Small Finance Bank has reported a record net profit of ₹160 crore for the second quarter (Q2) of FY 2026–27, doubling its previous quarter’s profit of ₹80 crore. The strong performance was driven by growth in secured lending, gold loans, operational efficiency and improved asset quality. The bank’s total advances increased 25% year-on-year (YoY) to ₹23,934 crore, while deposits grew 24% to ₹28,466 crore. Secured advances registered a 32% YoY growth to ₹15,377 crore, accounting for 64% of total advances. The gold loan portfolio crossed ₹10,000 crore, while microfinance disbursements surged 134% YoY. CASA deposits grew 10% to ₹6,645 crore, and the credit-deposit ratio stood at 82%. The bank’s cost of funds declined from 7.4% to 7.2%. Asset quality improved significantly, with Gross Non-Performing Assets (GNPA) declining to 2.8% and Net NPA (NNPA) falling to 0.3%. The Provision Coverage Ratio (PCR) strengthened to 94%. Interest income increased 43% YoY to ₹1,175 crore, while Net Interest Margin (NIM) improved to 5.9%. Operating profit surged 289% YoY to ₹362 crore, supported by an improvement in the cost-to-income ratio from 82% to 57.7%. Return on Assets (RoA) stood at 1.5%, while Return on Equity (RoE) reached 26.5%. The bank maintained a strong Capital Adequacy Ratio (CRAR) of 24.1%, with a Liquidity Coverage Ratio (LCR) of 141.5% and total net worth of ₹2,027 crore. Brickwork Ratings and CARE Edge Ratings upgraded the bank’s Tier-2 bonds to BWR A-/Stable and CARE A-/Stable, respectively. Commenting on the performance, Dr. K. Paul Thomas, MD and CEO of ESAF Small Finance Bank, said the record Q2 results reflected the bank’s strategic focus on secured lending, stringent asset quality monitoring and operational excellence. He reaffirmed ESAF’s commitment to building a sustainable and inclusive banking institution while continuing to advance financial inclusion across the country.