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MFI book declines, advances growth in line; deposits dip marginally; net slippage ratio declines in the SBL segment

Equitas Small Finance Bank has released its business update for 2QFY26. Here are the key highlights:

* Equitas SFB reported a growth of 8.6% YoY/4.1% QoQ in gross advances to INR391.5b (MOFSLe for net advances at 7.3% YoY/4.9% QoQ).

* The Non-MFI portfolio share has now increased to 91.3% of the total advances, growing 17.5% YoY/4.9% QoQ. The bank has consciously slowed its MFI book, and as a result MFI book dipped 3.5% QoQ and 39.4% YoY.

* On the liability front, total deposits declined 0.6% QoQ (up 10.9% YoY) to INR440.9b. However, CASA deposits grew 12.8% YoY/4.6% QoQ; as a result, the CASA ratio increased to 31% from 29% in 1QFY26 (MOFSLe for deposits at +1.9% QoQ/+13.4% YoY).

* Overall, the cost of funds declined to 7.35% (from 7.49% in 1QFY26).

* Net NPA slippage for the SBL segment (decreased to 2.23% from 3.22% in 1QFY26).

* The X bucket collection efficiency (CE) in MFI improved for Karnataka and Tamil Nadu, and for the overall portfolio as well. MFI loan mix stood at 9%, while secured loan mix stood at 91%.

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