ESAF Small Finance Bank Limited has appointed G Narasimha Murthy as Chief Risk Officer and Poulose Bharanikulangara as Head-Internal Audit for three years. The Board of Directors approved these changes on June 04, 2026, to ensure continuity in senior management roles critical for risk governance and internal controls.

The appointments follow the completion of employment contracts for the incumbents. Shri. Wilson Cyriac will retire as Chief Risk Officer on July 31, 2026, while Shri. Sivakumar P will retire as Head-Internal Audit on June 30, 2026. The new appointees will assume their respective roles immediately following these departures.

Shri. G Narasimha Murthy, a Chartered Accountant, brings deep expertise in credit, market, and operational risk. He is currently serving as Executive Vice President at Jana Small Finance Bank. His experience includes implementing Basel III regulatory frameworks and engaging with RBI supervisory processes.

Shri. Poulose Bharanikulangara holds an MBA in Banking & Finance and is a Certified Associate of the Indian Institute of Bankers. He brings over 35 years of banking experience from Bank of Baroda, having served across India, the UAE, and Mauritius in roles spanning credit, risk management, and audit.

Management Appointments

The disclosures were made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

ESAF Small Finance Bank reported a profit after tax of ₹24 crore for Q4 FY26, compared to ₹7 crore in Q3 FY26, reflecting sequential improvement in profitability as the bank's strategic portfolio rebalancing toward secured lending begins to bear results. The bank's management shared these highlights during its Q4 FY26 Earnings Conference Call held on May 4, 2026, with Dr. K. Paul Thomas (MD & CEO), Mr. George K. John (Executive Director), and Mr. Gireesh C.P. (EVP & CFO) addressing investors and analysts.

Business and Advances Growth

As of March 31, 2026, the bank's total business stood at ₹48,276 crore, registering 15% year-on-year growth compared to ₹42,055 crore in the previous year. Gross advances grew 19% year-on-year, while deposits increased 11% over the same period, reflecting balanced growth across both sides of the balance sheet.

The credit-deposit ratio stood at 83.5%, with retail deposits constituting 92% of total deposits and a CASA ratio of 23.9%. The bank noted that 88% of bulk deposits carry a non-prepayment clause, providing stability to its funding base. The Liquidity Coverage Ratio stood at 143.35% as of March 31, 2026.

Disbursements and Portfolio Mix

Disbursements for Q4 FY26 stood at ₹12,926 crore, reflecting 88% year-on-year growth, with secured lending constituting 78% of disbursements—marking the sixth consecutive quarter with over 75% secured share. For the full year FY26, the bank recorded its highest-ever disbursements of ₹42,530 crore, representing 103% growth over FY25.

The MARG portfolio (MSME, Agriculture, Retail, and Gold loans) was the key growth driver, with disbursements growing 133% during the year and advances growing 47% year-on-year. Gold loans and Mortgage loans each delivered growth of over 50%. The secured loan mix improved to 61% of advances from 53% a year ago, while the microfinance book remained stable at ₹8,746 crore as of March 2026, with its share reducing to 39% from 47% last year. Management reiterated the target of achieving 70% secured assets by March 2027.

Financial Performance Highlights

The following table summarizes key financial metrics for Q4 FY26:

Net interest income for the quarter was ₹518 crore, compared to ₹432 crore in Q3 FY26, with NIM improving to 7.3% from 6.6%, supported by lower cost of funds and a reduction in fresh slippages. Pre-provisioning operating profit stood at ₹241 crore, up 166% year-on-year, driven by business growth and higher fee income.

Asset Quality Improvement

Asset quality showed meaningful improvement on both a sequential and year-on-year basis. GNPA declined to 5.4% from 6.9%, and NNPA declined to 1.8% from 3.0% on a year-on-year basis. Slippages reduced significantly to ₹106 crore in Q4 FY26, compared to ₹427 crore in Q4 FY25. Notably, there were no ARC sales or technical write-offs during the quarter.

The credit cost for the current quarter stood at 1.08%, with management noting that some backlog of provisioning on the stock of NPA remains. On a steady-state basis, management indicated a credit cost of approximately 2% is expected, with FY28 cited as the horizon for normalization.

Distribution Network and Strategic Initiatives

As of March 31, 2026, the bank's distribution network comprised:

• 804 banking outlets
• 720 ATMs
• 1,047 customer service centres
• 32 institutional business correspondents
• Presence across 24 states and 2 union territories

The bank also crossed the milestone of 10 million customers during the year, with a strong representation of women borrowers. On the technology front, the ESAF 2.0 – StratoNeXt digital transformation program is progressing, with implementation expected to be completed before Q3 FY27. The initiative has been recognized with the Digital Transformation Excellence Award at the Hitachi Vantara Exchange and the Best Digital Financial Inclusion Award from the Indian Banks' Association.

Management Commentary and Outlook

During the Q&A session, management indicated a steady-state loan book growth guidance of 20% to 25%, noting that IBPC offloads of ₹650 crore during the year were not reflected in reported growth numbers. Cost-to-income ratio guidance was provided at approximately 55%, plus or minus 2%. NIM on a steady-state basis was guided at approximately 7%, plus or minus half a percentage point. Management also reiterated a target ROA of 2%, expected to be achieved by FY28, with traction anticipated over the next couple of quarters. The microfinance industry was described as showing signs of stabilization, with improving collection efficiencies and easing delinquencies supporting a more stable operating environment.