ESAF Small Finance Bank reports Rs 7 cr net profit in Q3

ESAF Small Finance Bank has reported a net profit of Rs 7 crore for the third quarter ended December 2025 against a Rs 211 crore loss in the year-ago period. The Kerala-based lenders total income rose to Rs 1,163 crore during the quarter under review from Rs 1,062 crore a year ago, ESAF Small Finance Bank said in a regulatory filing on Friday.

ESAF Small Finance Bank has reported a net profit of Rs 7 crore for the third quarter ended December 2025 against a Rs 211 crore loss in the year-ago period. The Kerala-based lender's total income rose to Rs 1,163 crore during the quarter under review from Rs 1,062 crore a year ago, ESAF Small Finance Bank said in a regulatory filing on Friday. The bank's interest income declined during the third quarter to Rs 894 crore compared to Rs 948 crore a year earlier. Its net interest income (NII) for Q3 FY26 increased to Rs 432 crore from Rs 372 crore in the same period of the preceding financial year. The net interest margin (NIM) improved to 6.5 per cent, driven by a better asset mix and lower cost of funds, it said. As regards asset quality, the gross non-performing asset (NPA) ratio moderated to 5.64 per cent as of December 31, 2025, from 6.96 per cent a year ago. The net NPA also eased to 2.73 per cent from 2.97 per cent at the end of December 2024. As a result, provisions and contingencies declined to Rs 243 crore in the December quarter from Rs 408 crore in the same quarter of the last fiscal year. During the quarter, the bank's capital adequacy ratio was almost flat at 22.68 per cent at the end of December 2025. Commenting on the performance, ESAF Small Finance Bank Managing Director and CEO K Paul Thomas said, ''Q3 FY26 marks a strong turnaround for ESAF, driven by the successful execution of our MARG strategy, focusing on MSME, Agri, Retail and Gold lending. The sharp improvement in asset quality and return to profitability clearly validates our shift towards a more secure, granular and sustainable portfolio''. With secured assets now accounting for 63 per cent of advances and witnessing strong traction, the bank is building a resilient balance sheet for long-term growth, he said.

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