Suryoday Small Finance Bank announced its unaudited financial results for the quarter and nine months ended December 31, 2025, showing mixed performance with profit growth offset by rising asset quality concerns. The bank's board of directors, meeting on January 22, 2026, approved the results and several strategic initiatives including a significant fundraising plan.

Financial Performance Overview

The bank reported steady growth in key financial metrics for Q3 FY26. Net profit increased to ₹36.56 crores compared to ₹33.30 crores in Q3 FY25, representing a 9.8% year-on-year growth. For the nine-month period ended December 31, 2025, net profit stood at ₹102.25 crores compared to ₹148.75 crores in the corresponding period last year.

Asset Quality Concerns

The bank's asset quality showed deterioration during the quarter. Gross NPAs increased to ₹790.35 crores from ₹528.95 crores in Q3 FY25, while net NPAs rose to ₹501.06 crores from ₹292.32 crores in the same period last year.

Capital Position and Ratios

The bank maintained a strong capital adequacy ratio of 21.94% as of December 31, 2025, compared to 26.92% in the corresponding quarter last year. The bank's return on assets for the quarter stood at 0.22% compared to 0.24% in Q3 FY25.

Board Approvals and Strategic Initiatives

The board approved several significant proposals that will be put to shareholders through postal ballot:

Fundraising Initiative:

• Approval to raise up to ₹1,000 crores through various modes including preferential allotment, qualified institutions placement (QIP), private placement, rights issue, or combination thereof

Leadership Continuity:

• Re-appointment of Mr. Krishna Prasad Nair (DIN: 02611496) as Non-Executive Independent Director for three years effective July 22, 2026

Segment Performance

The bank's retail banking segment continued to be the primary revenue driver, contributing ₹581.49 crores to total segment revenue in Q3 FY26. The treasury segment contributed ₹72.35 crores, while corporate banking added ₹41.14 crores to the overall performance.

Regulatory Compliance

The bank confirmed full compliance with regulatory requirements, stating no defaults on loans or debt securities. The financial results were prepared in accordance with applicable accounting standards and RBI guidelines, with an unmodified review report issued by joint statutory auditors Mukund M. Chitale & Co. and Gokhale & Sathe.

Suryoday Small Finance Bank has officially entered the gold loan segment as part of its strategic expansion into secured lending products. The bank announced the launch of its gold loan business with an initial rollout in Maharashtra, followed by a phased expansion to other states.

Strategic Portfolio Diversification

The gold loan launch represents a significant shift in Suryoday Small Finance Bank's lending strategy. Until now, the bank has primarily focused on unsecured business lending, particularly targeting small enterprises and women entrepreneurs. The move into gold loans aims to increase the share of collateral-backed loans in the bank's portfolio and create a more diversified asset mix.

According to the bank, existing customers have shown increased demand for secured credit options as their funding needs have grown. This customer-driven demand has influenced the bank's decision to expand into the secured lending space.

Product Features and Terms

The new gold loan offering comes with competitive terms designed to attract a broad customer base:

Customers can choose between two repayment structures:

• Monthly interest payments with principal repayment at maturity
• Bullet repayment of both principal and interest at tenure end

Expansion Strategy and Infrastructure

Suryoday Small Finance Bank plans to leverage its extensive network for the gold loan business rollout. The bank operates more than 700 banking outlets across over 15 states, providing a strong foundation for scaling the new product offering.

Baskar Babu Ramachandran, Managing Director and Chief Executive Officer, emphasized that the bank views gold loans as a secured lending product that supports portfolio diversification. The rollout strategy involves beginning operations in Maharashtra before expanding to other states nationally.

The bank indicated it will utilize existing distribution channels and underwriting processes while expanding the gold loan offering, ensuring operational efficiency during the scaling phase.

Market Opportunity and Background

The bank identified the gold loan market in India as underpenetrated with steady growth potential, making it an attractive segment for lenders seeking secured assets. This market assessment supports the bank's strategic decision to enter the gold loan space.

Suryoday Small Finance Bank began operations as a small finance bank in January 2017, having previously operated as a non-banking financial company. The bank currently operates across multiple states and union territories and maintains listings on major stock exchanges.