ESAF Small Finance Bank reported robust growth in key operational metrics for the quarter ended December 31, 2025, demonstrating strong momentum in both deposit mobilization and lending activities. The Thrissur-based private lender showcased improved financial positioning through strategic asset quality management and continued business expansion.

Deposit Growth and Composition

The bank's deposit portfolio demonstrated healthy growth across segments during the quarter. Total deposits reached ₹24,006 crore as of December 31, 2025, marking a significant increase from the previous year.

The CASA ratio improvement to 25.12% from 24.95% year-on-year indicates enhanced low-cost funding, though it declined from the previous quarter's 26.41%.

Advances Portfolio and Lending Mix

Gross advances showed strong double-digit growth, reaching ₹20,680 crore as of December 31, 2025, representing a 13.06% year-on-year increase and 8.06% quarter-on-quarter growth. The lending portfolio composition underwent significant transformation during the period.

The shift toward secured advances, including gold loans, mortgage, mobility, MSME and agriculture loans, now represents 63.33% of gross advances compared to 45.33% a year earlier, indicating improved risk management.

Asset Quality Management Actions

The bank undertook comprehensive asset quality improvement measures during 2025. Technical write-offs and sales of non-performing assets totaled ₹1,364 crore for the period from January 1, 2025, to December 31, 2025. Without these actions, advance growth would have been substantially higher at 20.52% year-on-year and 11.05% quarter-on-quarter.

During the quarter specifically, the bank completed transactions involving NPA sales aggregating ₹1,693.65 crore to asset reconstruction companies for total consideration of ₹183.18 crore. Disbursements increased 46.10% on a quarter-on-quarter basis, reflecting strong business momentum.

Network Expansion and Leadership Changes

ESAF Small Finance Bank's operational footprint encompasses a customer base of 99.85 lakh as of December 31, 2025, with 5.71 lakh new customers added during the year. The distribution network includes:

• 788 branches
• 720 ATMs
• 1,045 customer service centres
• Presence across 24 states and two union territories

In a significant leadership development, the bank appointed Karthikeyan Manickam as its new part-time chairman following the retirement of Ravimohan Periyakavil Ramakrishnan, who completed two consecutive terms in the position.

Market Performance

Shares of ESAF Small Finance Bank Limited closed at ₹26.85 on the BSE, gaining ₹0.08 or 0.30% during the trading session, reflecting positive market sentiment toward the bank's operational performance and strategic initiatives.

ESAF Small Finance Bank Limited has announced its Q3FY26 quarterly results under Regulation 30, showcasing continued growth momentum across key financial parameters. The bank has demonstrated strong operational performance with significant expansion in both deposit mobilization and lending activities, reflecting its growing market presence in the small finance banking segment.

Deposit Performance Analysis

The bank's deposit portfolio has shown steady growth trajectory with total deposits reaching ₹24,006.00 crore, marking a 7.10% year-over-year increase. The CASA (Current Account Savings Account) segment performed particularly well, growing by 7.83% YoY to ₹6,030.00 crore. The CASA ratio improved to 25.12% as compared to 24.95% in the previous year, indicating better cost of funds management.

Advances Portfolio Growth

ESAF Small Finance Bank's gross advances registered robust growth of 13.06% year-over-year to ₹20,680.00 crore. The advances portfolio witnessed a strategic shift with secured advances growing significantly by 57.95% to ₹13,097.00 crore, now constituting 63.33% of total gross advances compared to 45.33% in the previous year. Micro loans decreased by 24.16% to ₹7,583.00 crore, while retail and other loans surged by 57.95%.

Operational Highlights and Strategic Developments

The bank's customer base expanded to 99.85 lakh customers with 5.71 lakh new additions during the year. The distribution network now comprises 788 branches, 720 ATMs, and 1,045 Customer Service Centres across 24 states and 2 union territories. During the quarter, the bank completed NPA sales including technical write-offs amounting to ₹1,693.65 crore to Asset Reconstruction Companies for ₹183.18 crore consideration.

Leadership Changes and Asset Quality Management

The bank appointed Shri. Karthikeyan Manickam as the new Part-Time Chairman following the retirement of Shri. Ravimohan Periyakavil Ramakrishnan. The bank undertook technical write-offs and NPA sales of ₹1,364.00 crore during the period, which impacted the reported growth rates. Without these adjustments, the YoY growth would have been 20.52% for advances.