Equitas Small finance bank Q2 FY24
Notes:
- Festivals coming in will improve cashflows for households in H2
- Commerial vehicles and SBL have healthy indicators, can push more high yielding products
- CASA an area of focus for the bank, will grow the book going forward
- Old deposits getting replaced with new ones, interest costs to go up to 7.5%
- NIM drop to remain stable within guidance
- Demand remains strong for CV. Focus on LCV
- Demand to remain strong for Consumer Vehicle loans as festive season is here
- Bank sold non performing advances to ARC for 162Cr (SBL book), recovered 118 Cr and wrote off 44 cr
- Interest cost to move to 7.5% over the next 6 months
- Increased the lending rates in different products will experience the effect in next quarters
- H2 is more robust from a disbursement perspective, this will help in maintaining RoA
- If interest rates remain the same or go down, it will help the bank as 85% of the loans are fixed rate loans
- Opex grows sharply in the first half (staff costs) and decreases opex towards the end of the year
- 18.3% yield on disbursement in Q2FY24,16.96% yield in SBL and CV. These yields are going up QoQ, effects will be realised over time as it is a fixed rate loan book
- Incremental growth in deposits has slightly affected NIMs
- Slippages are marginally higher and this is due to CV, weak collections. But these will be covered up soon