ESAF Small Finance Bank returned to profitability in the quarter ended June 2026 (Q1FY27), reporting a net profit of ₹80 crore against a net loss of ₹81 crore in the year-ago period, aided by stronger lending growth and improved asset quality. The lender’s earnings also improved sequentially from a net profit of ₹24 crore in the March quarter, triggering an 18% rally in its shares to a 52-week high of ₹43 on Friday.
The bank attributed the turnaround to its strategy of diversifying the loan book towards secured lending and improving asset quality. “Our strategy of building a diversified, secured and customer-centric portfolio is delivering encouraging results for growth, profitability and asset quality,” said K. Paul Thomas, Managing Director & CEO, ESAF Small Finance Bank.
Net interest income rose 54% year-on-year to ₹584 crore from ₹378 crore a year earlier, while net interest margin expanded to 7.9% from 6.0%. During the quarter, the bank’s total business crossed the ₹50,000-crore milestone, rising to ₹51,140 crore. Gross advances increased 27% year-on-year to ₹23,216 crore. Secured advances grew 35% to ₹14,465 crore, raising their share in the loan book to 62% from 59% a year ago. Unsecured advances rose 16% to ₹8,751 crore.
On the liabilities side, deposits grew 19% year-on-year to ₹26,924 crore, while low-cost CASA deposits increased 12% to ₹6,297 crore. The CASA ratio stood at 23.4%. Asset quality improved sharply during the quarter. Gross non-performing assets (GNPA) declined to 5.4% from 7.5% a year earlier, while net NPA fell to 0.8% from 3.8%.