ESAF SFB's Q1 FY26: Strategic Loan Shift Takes Center Stage 🚀
Hey finance watchers! ESAF Small Finance Bank (ESAF SFB) has just dropped its key business updates for the quarter ended June 30, 2025 (Q1 FY26), and there’s a clear strategic shift unfolding within its loan book. At the time of this announcement, ESAF SFB shares were trading around ₹34.4.
Let’s dive into the numbers:
Deposits: Steady Growth with a Strong CASA Push
ESAF SFB continues to grow its deposit base. Total deposits saw a healthy 8.67% year-on-year (YoY) increase, reaching a solid ₹22,698 Crore. What’s even more impressive is the growth in Current Account Savings Account (CASA) deposits, which surged by 14.23% YoY to ₹5,628 Crore.
The bank’s CASA ratio stood at 24.80% as of June 30, 2025. A higher CASA ratio is generally good news for banks as it signifies access to low-cost funding, which helps improve profitability. While the YoY growth is strong, it’s worth noting a slight quarter-on-quarter dip in total, term, and CASA deposits compared to March 31, 2025.
Here’s a quick look at the deposit figures:
| Particulars (₹ In Crore) | 30-June-25 * | 30-Jun-24 | Y-o-Y | 31-Mar-25 | Q-o-Q |
|---|---|---|---|---|---|
| Total Deposits | 22,698 | 20,887 | 8.67% | 23,277 | -2.49% |
| Term Deposits | 17,070 | 15,960 | 6.95% | 17,494 | -2.42% |
| CASA | 5,628 | 4,927 | 14.23% | 5,783 | -2.68% |
| CASA Ratio | 24.80% | 23.59% | - | 24.84% | - |
Advances: A Strategic Pivot Towards Secured Loans 🎯
This is where ESAF SFB’s strategy really shines through. While gross advances saw a modest 2.98% YoY decrease to ₹18,224 Crore, a deeper look reveals a significant portfolio rebalancing. The bank is strategically shifting away from its traditional micro loan heavy portfolio towards more secured lending.
- Micro Loans plummeted by a substantial 39.14% YoY to ₹7,522 Crore.
- Conversely, Retail and Other Loans (which primarily include secured advances like Gold loans, Mortgage, Mobility, MSME, and Agriculture loans) witnessed a massive 66.59% YoY surge, reaching ₹10,702 Crore!
This pivot means secured advances now make up a significant 58.72% of the bank’s gross advances, a sharp increase from 34.20% a year ago. This move is generally positive for asset quality and reduces inherent risks, as secured loans typically have lower default rates.
Here are the advance figures:
| Particulars (₹ In Crore) | 30-June-25 * | 30-Jun-24 | Y-o-Y | 31-Mar-25 | Q-o-Q |
|---|---|---|---|---|---|
| Micro Loans | 7,522 | 12,359 | -39.14% | 8,857 | -15.07% |
| Retail and Other Loans | 10,702 | 6,424 | 66.59% | 9,922 | 7.86% |
| Gross Advances | 18,224 | 18,783 | -2.98% | 18,779 | -2.96% |
| Total Loan Book # | 19,808 | 19,664 | 0.73% | 19,643 | 0.84% |
Note: The Total Loan Book includes gross advances plus advances originated and transferred under securitization, assignment, and interbank participation certificates, for which the bank retains collection responsibilities.
Other Key Highlights:
- Growing Customer Base: ESAF SFB continues to expand its reach, adding 1.65 lakh new customers this quarter, bringing its total customer base to an impressive 95.80 lakh as of June 30, 2025.
- Widespread Network: The bank’s distribution network is robust, comprising 788 branches, 713 ATMs, and 1095 Customer Service Centres across 24 states and 2 union territories.
- Asset Quality Clean-up: In a proactive move, the bank transferred a Non-Performing Asset (NPA) / Technical Write-off portfolio of ₹733.40 Crore (as of March 31, 2025) to an Asset Reconstruction Company (ARC) for ₹73.34 Crore. This clean-up effort helps in managing its asset quality effectively.
It’s important to remember that these figures for the quarter ended June 30, 2025, are provisional and subject to a limited review by the bank’s statutory auditors.
Overall, ESAF SFB’s Q1 FY26 updates paint a picture of a bank strategically re-aligning its lending portfolio for potentially more sustainable and lower-risk growth, while continuing to expand its customer reach and deposit base. For more detailed investor information, you can always check their investor relations page: ESAF Bank Investor Relations.
source: Corporate Announcement
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