Shares of Equitas Small Finance Bank were trading higher on Monday, January 5, after the lender reported resilient provisional business performance as of December 31, 2025, supported by healthy advances growth and improving asset quality trends.
In its provisional update, the bank said gross advances (including IBPC, securitised and assigned portfolio of Rs 2,674 crore) stood at Rs 43,269 crore, marking a 15.86% year-on-year increase from Rs 37,344 crore in December 2024. On a sequential basis, advances rose 10.60% quarter-on-quarter from Rs 39,123 crore as of September 30, 2025. Excluding a Rs 1,343 crore direct assignment purchase of agri assets, advances grew 12.27% YoY and 7.16% QoQ.
Segment-wise performance
Microfinance and micro loans stood at Rs 5,159 crore, rising sharply 51.94% QoQ, though declining 3.93% YoY. In contrast, non-micro segments expanded 19.19% YoY and 6.67% QoQ to Rs 38,110 crore, underscoring the bank’s increasing focus on secured lending.
Deposits and CASA trends
Total deposits were reported at Rs 43,668 crore, up 7.24% YoY from Rs 40,719 crore, though marginally lower 0.97% QoQ from Rs 44,094 crore. CASA deposits stood at Rs 12,886 crore, reflecting 10.62% YoY growth, but a 5.40% QoQ decline, resulting in a CASA ratio of 30%.
The bank’s cost of funds declined to 7.13%, compared with 7.49% a year ago, while the credit-deposit ratio improved to 92.96% (or 85.41% after adjusting for refinance borrowings), up from 79.91% in June 2025.
Asset quality shows recovery
Equitas reported strong improvement in collection and asset quality metrics. The 1–90 DPD in MFI and micro loan segments dropped sharply to Rs 106 crore (2.77%) in December 2025 from Rs 365 crore (8.45%) in April 2025. X-bucket collection efficiency remained strong at 98.69% in October, 99.12% in November and December, with Q3 FY26 efficiency at 98.99%.
Fresh overdue principal outstanding declined to Rs 19.59 crore in December from Rs 97.48 crore in April, while net slippages eased to 1.47% in Q3 FY26, compared with 3.22% in Q1 FY26.
Portfolio mix
As of December 31, 2025, microfinance and micro loans accounted for around 12% of the portfolio including direct assignments, while secured loans formed nearly 88–91%, highlighting a continued shift toward lower-risk lending.
The bank stated that all figures disclosed are provisional in nature and subject to limited review by statutory auditors and approval by the Audit Committee and Board.
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