Fino Payments Bank has reported a stable performance for the first quarter, demonstrating resilience amid a challenging operating environment. The bank has outlined ambitious growth plans, including applying for a Small Finance Bank (SFB) license and enhancing its digital capabilities.

Financial Highlights

Operational Performance

• Customer Base: Reached 1.5 crore, with over 6.8 lakh new accounts added in the quarter.
• Transaction Volume: Processed over 97 crore transactions, a 39% increase from the previous year.
• Digital Adoption: The bank now has over 53 lakh digitally active customers, a 26% year-over-year increase.

Strategic Initiatives

1. SFB License Application: Fino Payments Bank has announced its intention to apply for a Small Finance Bank license, signaling its ambition to expand its banking services.

2. Core Banking System Upgrades: As part of its long-term digital expansion strategy, the bank plans to implement improvements to its core banking system.

3. UPI Stack Enhancement: The bank is focusing on strengthening its UPI (Unified Payments Interface) platform with new product offerings aimed at improving user experience and boosting digital throughput.

4. Focus on High-Margin Segments: The bank is shifting its revenue mix towards high-margin segments like CASA (Current Account Savings Account) and digital payment services.

Management Commentary

Rishi Gupta, MD & CEO of Fino Payments Bank, stated, "Our momentum in digital and liabilities business strategically positions us for long-term sustainable growth despite the evolving environment. The Bank is enhancing its UPI stack with new product offerings aimed at boosting digital throughput, improving user experience, and strengthening platform-level monetisation opportunities. Our Small Finance Bank application is being evaluated by the regulator."

Ketan Merchant, CFO, added, "While topline growth was modest at 4% YoY, our EBITDA grew 16% YoY, supported by a favorable shift in revenue mix towards high-margin segments like CASA and digital payment services. Our net revenue margins increased by 2.5%, indicating our enhanced focus on the bottom line."

Outlook

Despite the challenging operating environment and increased regulatory focus in the payment banking industry, Fino Payments Bank's strategic initiatives and focus on digital growth position it well for future expansion. The potential transition to a Small Finance Bank, if approved, could open up new avenues for growth and diversification of services.

As the bank continues to navigate the evolving financial landscape, its emphasis on digital adoption, customer base expansion, and operational efficiency will be crucial in driving sustainable growth and profitability in the coming quarters.

Fino Payments Bank , a digital-focused financial institution, has reported a mixed set of financial results for the first quarter, showcasing resilience in the face of regulatory changes and a challenging operating environment.

Revenue Growth and Profit

The bank reported a total income of ₹453.47 crore for Q1, marking a 4% increase from ₹436.86 crore in the same quarter last year. However, the net profit saw a decline, coming in at ₹17.76 crore compared to ₹24.27 crore in the corresponding quarter, representing a 27% year-on-year decrease.

Key Performance Indicators

Despite the profit decline, Fino Payments Bank demonstrated strong growth in several key areas:

• Average deposits rose by 34% year-on-year to ₹2,275 crore, indicating growing customer confidence.
• The bank's customer base expanded to 1.5 crore, with over 6.8 lakh new accounts opened during the quarter.
• Digital throughput crossed ₹67,800 crore, up 54% compared to the same period last year.
• The number of digitally active customers increased to over 53 lakh, a 26% year-on-year growth.

Business Segment Performance

The bank's performance varied across different business segments:

CASA and Digital Payment Services

• Combined revenue grew by 40% year-on-year
• CASA revenue increased to ₹154 crore, up 30% from the previous year
• Digital Payment Services revenue surged by 59% to ₹106 crore

Traditional Business

• Domestic Money Transfer, Micro ATM, and AePS experienced a 43% decline due to tightened regulations on remittances

Cash Management Services (CMS)

• Showed a slight decline of 2% year-on-year

Operational Highlights

Management Commentary

Rishi Gupta, MD & CEO of Fino Payments Bank, commented on the results: "In continuation to last year, Q1 witnessed active regulatory oversight and sector-wide efforts to counter ecosystem challenges in digital payment services. Our momentum in digital and liabilities business strategically positions us for long-term sustainable growth despite the evolving environment."

CFO Ketan Merchant added: "While topline growth was modest at 4% YoY, our EBITDA grew 16% YoY, supported by a favorable shift in revenue mix towards high-margin segments like CASA and digital payment services. Our net revenue margins increased by 2.5%, indicating our enhanced focus on the bottom line."

Future Outlook

The bank is enhancing its UPI stack with new product offerings aimed at boosting digital throughput, improving user experience, and strengthening platform-level monetization opportunities. Additionally, Fino Payments Bank's application for a Small Finance Bank license is currently under evaluation by the regulator, potentially opening up new growth avenues in the future.

In conclusion, while Fino Payments Bank faced some challenges in Q1, particularly in its traditional business segments, its strong performance in digital services and deposit growth demonstrates the bank's ability to adapt to the changing financial landscape and regulatory environment.