Equitas Small Finance Bank, also known as Equitas SFB, earlier told that they had a reasonably good fourth quarter as collections and disbursements continued to pick up across the product segments. Initially, the vehicle finance portfolio has performed better than last time.
The Chennai-based bank stated that it continued to focus on collections in March, achieving a collection efficiency of 108.51% while maintaining its billing efficiency of 91.12 %. Collection efficiency is calculated as total monthly collections as a percentage of total EMI due in March. In contrast, billing efficiency is calculated as a percentage of total EMI due in March.
MD & CEO P N Vasudevan opined that at an earnings decision post announcement of March quarter results that the bank had a fairly sensible quarter as collections and disbursements continued to rise across the merchandise segments, as told to analysts.
“In terms of liabilities, the team has done an outstanding job across all indicators, including retail growth, fee income, digital traction, and branch productivity. We are witnessing good traction was opined by him.
However, he added that, with new lockdowns and restrictions being announced across the country and uncertainty about the impact on the customer segment, guidance for the current year seemed too speculative to state at this point.
According to Vasudevan, the bank’s advances yearly increased by 17% as of March 31, with secured loans accounting for approximately 81% of the total. Its flagship product, a small business loan, continues to show reasonable growth.
Used car advance which was launched within the finish of the last year has crossed a mark of Rs 120 crore. MSE finance, which began after the conversion to a bank, has done well and now contributes 7% of the overall book.
He stated that the bank acquired 4.76 lakh liability accounts in FY2021 compared to 1.59 lakh in FY2020, a nearly threefold or 300% increase. This was largely due to the bank’s numerous digital initiatives, increased productivity, and strong leadership. Deposits increased by 58% year on year, while savings accounts increased by 174% and 45% quarterly.
According to him, the bank has nearly reached its target product mix level, with microfinance accounting for 18%, small business loans accounting for 45%, commercial vehicles accounting for around 25%, and SME and NBFC lending accounting for the rest. He affirmed that the bank had achieved a consistent product mix.“Our affordable housing loan, which we launched about a year ago, has begun to contribute, and then there are a few supplementary products like a used car and gold loan,” he explained, adding, “We are not really planning to launch any new vertical as such even though we are perfectly content with the product mix that we have now.”