Equitas Small Finance Bank (EQUITASBNK) investor relations material

Executive summary

• Stress in the microfinance portfolio, especially in Karnataka, has significantly reduced, with collection efficiencies improving and slippages declining.

• Gross advances grew 9% year-on-year, led by strong disbursements, especially in microfinance, which saw 156% quarter-on-quarter growth.

• Non-MFI book grew 17% year-on-year, with strong growth in small business loans, MSE, and used car finance.

• The bank maintains a dominant position in new-to-credit MSME disbursements, with a focus on quality growth and risk management.

• Unaudited financial results for the quarter and half year ended September 30, 2025, were approved by the Board and reviewed by statutory auditors, with no modifications in their report.

Financial highlights

• Net interest income for Q2 FY26 was INR 774 crores, with total net income at INR 998 crores.

• PAT for Q2 FY26 stood at INR 24 crores, reversing a loss of INR 224 crores in Q1 FY26 and up 87% year-on-year.

• Gross advances reached INR 39,123 crores, and deposits grew to INR 44,094 crores, both up year-on-year.

• Total income for the quarter ended September 30, 2025, was ₹1,84,629.26 lakh, up from ₹1,79,380.22 lakh year-over-year.

• Disbursements in Q2 FY26 reached INR 5,380 crores, with non-MFI disbursements at a record high.

Outlook and guidance

• NIM is expected to recover and strengthen in Q3 and Q4 FY26, targeting a steady state of 6.5%-7%.

• Credit costs are projected to stabilize at 1.5%-1.7% in the short to medium term, with further tapering by Q4 FY26.

• Advances growth of 20%+ is targeted from the next financial year, with disbursement growth expected to support this.

• MFI profitability expected to normalize by Q4 FY26; exit ROA of about 1% targeted for Q4 FY26.

• The bank continues to follow RBI and SEBI guidelines for capital adequacy, liquidity, and risk management.