IGI Logo

Stress in MFI showing signs of stability; CASA ratio stable

Equitas Small Finance Bank (EQUITASB) has released its business update for 4QFY25. Here are the key highlights:

* EQUITASB reported a growth of 10.6% YoY (1.7% QoQ) in gross advances to INR379b.

* The non-MFI portfolio of the bank, which now forms 88% of the total advances, has grown 19% YoY (4.65% QoQ). The bank has consciously slowed down disbursements in MFI (now at 12% of total loan mix), which declined 28% YoY (15.7% QoQ). The stress in MFI is finally showing early signs of stability, with the collection efficiencies at 98.36% in Mar’25. Ex of Karnataka, it improved to 98.93% in Mar’25 vs. 98.38% in Dec’24.

* On the liability front, total deposits grew 19% YoY/5.8% QoQ to INR431b. In contrast, CASA deposits grew 7.4% YoY/6.4% QoQ to INR124b. As a result, the CASA ratio has remained stable at 29% in 4QFY25.

* Overall, the cost of funds rose to 7.54% in 4QFY25 from 7.49% in 3Q.

* Gross NPA slippage improved to 5.91% in 4QFY25 vs. 6.5% in 3QFY25. MFI slippages stood at 14.37% vs. 14.83% in 3QFY25.

* The X bucket collection efficiencies (CE) in MFI, which had gone down at the beginning of FY25, have started improving from 4QFY25. For the rest of the country, this CE has almost normalized, while Karnataka is showing signs of improvement in Mar’25. The slippages and credit costs for the secured advances are expected to remain within normal levels.

For More Research Reports : Click Here 

For More Motilal Oswal Securities Ltd Disclaimer
http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html
SEBI Registration number is INH000000412