Q1FY21 Financial Performance of Equitas Small Finance Bank Limited

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Equitas Holdings Limited [EHL] announces the Q1FY21 financial performance (unaudited) of its subsidiary Equitas Small Finance Bank [ESFBL]

PBT before provision & Write-off at Rs. 146 Cr, growth of 19% YoY

Cumulative COVID provisions of Rs. 144.63 Cr

Moratorium Opt in % at 43% as of July 2020 from 51% as of June 2020

Retail TD at Rs. 4,377 Cr, growth of 96% YoY

Q1FY21 Highlights:

1.      Key Highlights for Q1FY21:

·         Advances^:

o   Advances^ as of Q1FY21 was at Rs. 15,573 Cr, Advances^ growth of 27% YoY 

o   The Bank disbursed Rs. 564 Cr in Q1FY21

o   76% of advances* is secured loans

·         Liabilities:

o   Deposits excluding CD at Rs. 11,471 Cr as on 30th June 2020, growth of 30% YoY and 11% QoQ

o   Retail TD at Rs. 4,377 Cr as on 30th June 2020, growth of 96% YoY and 15% QoQ

o   Savings Account deposits at Rs. 2,024 as on 30th June 2020, growth of 9% QoQ

o   CASA stood at Rs. 2,354 Cr as on 30th June 2020, CASA as a % of Total Deposits at 21 %

^Advances = Gross Advances including IBPC issued

o   All the Channels (TASC, CA, Corporate Salary, NR) started their full-fledged functioning in Jun’20

·         Key Ratios:

o   Cost to Income+ at 66.41% in Q1FY21 as compared to 69.09% in Q1FY20

o   RoA^ and RoE# for Q1FY21 at 1.20% and 8.72% respectively

·         Capital:

o   As of June 30, 2020 Total CRAR at 21.59% and Tier-I CRAR of 20.61%; Well above minimum regulatory requirements of 15% and 7.5%

o   Tier II Capital at 0.98%

·         Treasury & Liquidity:

o   Bank has undertaken Inter-Bank Participation Certificates (IBPCs) with a mix of PSL/Non-PSL advances which further enhances the liquidity of the Bank

o   Liquidity Coverage Ratio (LCR) as on 30.06.2020 at 139.4% much above the minimum regulatory requirement of LCR at 80%

o   Average cost of funds for Q1FY21 at 7.63%

2.      Profit & Loss:

o   Net Interest Income for Q1FY21 at Rs. 404 Cr as against Rs. 337 Cr in Q1FY20, NIM* at 8.63%

o   PBT before provisions and write off for Q1FY21 at Rs. 146 Cr as against Rs. 123 Cr in Q1FY20

o   During the quarter, Bank made provisions of Rs. 68.34 Cr including additional provision of Rs. 45 Cr for potential impact of COVID-19 in addition to Rs. 99.63 Cr COVID-19 provision created in last quarter.

o   The bank now carries Rs. 144.63 Cr of COVID-19 related provisions (other than Standard and NPA Provisions), which constitutes 0.93% of our total Gross Advances.

o   PAT for Q1FY21 at Rs. 60 cr as against Rs. 59 Cr in Q1FY20

NIM = Net interest income as a % of avg. income earning assets |+Cost to income ratio is calculated as a ratio of Operating expenses divided by Net Operating Income (Net Operating Income is a sum of net interest income and other income) ^RoA – ratio of the net profit for the period/year total average assets | RoE# – Ratio of the net profit for the period/ to the average shareholders’ Equity

3.      Balance Sheet:

·         Advances^ as of June 30, 2020 grew 27% YoY to Rs. 15,573 Cr

o   Micro Finance grew by 16% YoY from Rs. 3,124 Cr in Q1FY20 to Rs. 3,618 Cr in Q1FY21

o   Small Business Loans (Incl. HF) grew by 32% YoY from Rs. 4,926 Cr in Q1FY20 to Rs. 6,484 Cr in Q1FY21

o   Vehicle Finance grew by 25% YoY from Rs. 3,027 Cr in Q1FY20 to Rs. 3,776 Cr in Q1FY21

o   MSE Finance grew by 154% YoY from Rs. 280 Cr in Q1FY20 to Rs. 712 Cr in Q1FY21

o   Corporate Loans grew by 39% YoY from Rs. 555 Cr in Q1FY20 to Rs. 772 Cr in Q1FY21

4.      Liabilities & Branch Banking:

·         Deposits excluding CD at Rs. 11,471 Cr, growth of 30% YoY

·         Retail TD at Rs. 4,377 Cr as on 30th June 2020, growth of 96% YoY and 15% QoQ

·         Savings Account deposits at Rs. 2,024 as on 30th June 2020, growth of 9% QoQ

·         CASA stood at Rs. 2,354 Cr as on 30th June 2020, CASA as a % of Total Deposits at 21%

5.      Asset Quality:

·         GNPA$ at 2.68% in Q1FY21 as compared to 2.72% in Q4FY20 and 2.73% in Q1FY20

·         NNPA$ at 1.39% in Q1FY21 as compared to 1.50% in Q4FY20 and 1.54% in Q1FY20

6.      Moratorium Update:

Asset Products

As on June 2020

As on July 2020

Opt in % of Gross Advances as on 31st March 2020

Opt in % of Gross Advances as on 30th June 2020

Micro Finance

59%

42%

Small Business Loans

42%

40%

New Commercial Vehicle Finance

65%

54%

Used Commercial Vehicle Finance

70%

60%

MSE Finance (Working Capital)

48%

46%

Corporate – NBFC Book

0%

0%

Corporate – Small Corporate

96%

96%

Total

51%

43%

 

$GNPA & NNPA including IBPC

About Equitas Holdings Limited [EHL]

Equitas Holdings Limited (‘the Company’) is a Non-Deposit Taking Systemically Important – Core Investment Company – (CIC-ND-SI) registered with The Reserve Bank of India.  The main objects of EHL are interalia (i) to carry on business of investment company/finance Company, and (ii) to carry on business of holding company and to invest in subsidiary companies

The Company has the following Subsidiaries:

·         Equitas Small Finance Bank Limited, licensed under Section 22 of the Banking Regulations Act, 1949 to carry on the business of small finance bank;

·         Equitas Technologies Private Limited [ETPL], a Company registered under the Companies Act, 2013 engaged in the business of freight aggregation.

About Equitas Small Finance Bank Limited [ESFBL]

Equitas Small Finance Bank Limited is the largest SFB in India in terms of number of banking outlets, and the second largest SFB in India in terms of assets under management and total deposits in Fiscal 2019. (Source: CRISIL report). Its focus customer segments include individuals with limited access to formal financing channels on account of their informal, variable and cash-based income profile. It offers a range of financial products and services that address the specific requirements of these customer segments by taking into account their income profile, nature of business and type of security available. Its asset products are suited to a range of customers with varying profiles.

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