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earnings | IST

Equitas SFB bets on 15-20% loan growth in FY22; expects Rs 500-600 cr potential restructuring in Q2

Equitas Small Finance Bank reported its Q1FY22 earnings numbers with elevated stress weighing on the performance. Further, loan book has declined and operating profit is weak for a second straight quarter. PN Vasudevan, MD and CEO of Equitas Small Finance Bank, discussed the numbers further.

Equitas Small Finance Bank reported its Q1FY22 earnings numbers with elevated stress weighing on the performance. Further, loan book has declined and operating profit is weak for a second straight quarter. PN Vasudevan, MD and CEO of Equitas Small Finance Bank, discussed the numbers further.
“In terms of growth and disbursement, almost 90 percent of our borrowers are first-time borrowers. We will not be going slow on our disbursement. As and when the market opens up, customers are certain to get back, we should be looking to fund them as normal,” he said.
“Last year our growth was about 15 percent. This year we expect to have a similar kind of growth, 15-20 percent is what we expect to grow this year also, assuming there is no extremely severe third wave of COVID-19,” he added.
The bank has restructured about Rs 900 crore in Q1FY22 as well as up to July. “We have also indicated that we expect another about Rs 500-600 crore of potential restructuring coming in Q2FY22,” he said.
Once the country opens up, the borrowers are able to come back and repay. “Till December of last year, our collection efficiency was almost back to normal. So we expect, this yeas as well if Q2FY22 and Q3FY22 proceeds and lockdowns are not as heavy as it was in Q1FY22, we should be able to see our customers coming back much better and be able to pay back as normal,” he mentioned.
The effect of a possible third wave of COVID-19 hopefully will be much less than what it was in second wave of COVID-19, he further mentioned.
“Our borrowers are tried and tested people. They have been with us for more than 10-12 years now. We have to just weather out whatever happens. We have to go along with our clients, we don’t want to pressurise our clients to pay back,” he stated.
For the full interview, watch the accompanying video.