Are ESAF Small Fin latest results good or bad?

Aug 08 2025 07:33 PM IST
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ESAF Small Finance Bank's latest results are concerning, with a decline in net interest income, a negative operating profit of Rs 70.22 crore, and worsening asset quality, as gross NPAs reached 7.48%. Overall, the bank is facing significant operational challenges.
ESAF Small Finance Bank has reported financial results for the quarter ending June 2025 that reflect significant challenges in its operational performance. The bank's net interest income has declined to Rs 377.87 crore, which is the lowest figure recorded in the last five quarters, indicating a persistent downward trend in income from its core business activities.

The interest earned for this quarter is Rs 828.23 crore, also marking the lowest in five quarters, with a notable decrease of 14.2% compared to the average of the previous four quarters. Furthermore, the operating profit has turned negative, resulting in a loss of Rs 70.22 crore, which underscores a decline in operational efficiency, as shown by an operating profit margin of -8.48%.

Additionally, the bank's asset quality has worsened, with gross non-performing assets (NPA) reaching 7.48%, the highest level in five quarters, and net NPA at 3.77%. While there has been an increase in non-operating income to Rs 195.14 crore, this growth may not be sustainable in the long term.

Overall, the financial performance of ESAF Small Finance Bank for this quarter highlights considerable operational difficulties. The company saw an adjustment in its evaluation in light of these results.
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