Phenomenal 16% increase in net worth of Equitas Small Finance Bank in FY2020

Phenomenal 16% increase in net worth of Equitas Small Finance Bank in FY2020Equitas Small Finance Bank (ESFBL) a subsidiary of Equitas Holdings, reported a net profit of Rs 244 crore for the year ended 31st March, 2020 as compared to Rs 211 crore in the previous FY, registering an increase of 15.6%. ESFBL’s total income grew by 22% to Rs 2,927.8 crore during the present year from Rs 2,394.83 from the previous year.

The ratio of gross NPAs to advances grew from 2.53% to 3% in the previous year while the percentage of net NPA to advances rose from 1.44% to 1.66%, according to the bank.

ESFBL said that the lockdown had led to significant dislocation and disruption of businesses and individuals, impacting regular banking operations such as fund-mobilization, lending, and collections.

Based on the assessment of the recoverability of advances, it has made a provision of Rs 99.63 crore in the period ended 31st March 2020, after considering the internal and external norms as per RBI.

ESFBL granted a moratorium of 3 months on payment of all installments and interest falling due between March 1 and May 31, 2020 to all eligible borrowers. “The full extent of Covid-19 impact on the bank’s operations and financial metrics, including impact on provisioning on advances, will depend on government and regulatory guidelines and future developments” it said.

In March 2020, ESFBL had filed a revised Draft Red Herring Prospectus after addressing Sebi’s observations on its previous DRHP. The bank which was in the process of completing the IPO of shares had to defer process for listing due to pandemic and the resultant lockdown.

On the IPO plans, the company revealed that the management and the board of directors remain committed to completing the IPO of shares once normalcy is restored.

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