SUMMARY
Fino’s margins have grown 3.4x compared to INR 1.3 Cr profit of Q4 FY2020
Fino Payments Bank posted an 86% increase in its net revenue to INR 689 Cr in FY2020
It has about 5.5 Lakh banking points across India, and plans to expand to 10 Lakh in 3 years
Riding on the surge of digital transactions due to the pandemic, Mumbai-based Fino Payments Bank has recorded its third profitable quarter. The company has registered a net profit of INR 4.5 Cr in the second quarter of FY2021, ending in September.
Fino Payments Bank had recorded a net profit of INR 1.9 Cr in Q1 of FY2021, which translated into a 136% or 2.3x profit growth in Q2. Compared to the net profit of INR 1.3 Cr recorded in Q4 of FY2020, the company’s margins have grown by nearly 246% or 3.4x.
The Mumbai-based payments bank has achieved an operating profit of INR 23.5 Cr in the first half of FY2021, against an INR 7 Cr loss in the first half of FY2020. This translates into a 4x growth. The company had turned profitable on an operating level in the fourth quarter of FY2020, ending in March. In Q2 FY2021, the company’s operating profit was at INR 13 Cr.
In FY2020, Fino Payments Bank posted an 86% increase in its net revenue to INR 689 Cr from INR 370 Cr in FY2019.
Commenting on the growth, Fino Payments Bank’s MD and CEO Rishi Gupta explained that it managed to increase its margins by scaling up its asset-light phygital network and creating opportunities for customers, merchants, and partners to maximise utilisation of banking services. The company also witnessed a change in customer’s banking behavior resulting in increased transactions.
The company claimed that its network facilitated transactions worth INR 33,000 Cr in the second quarter, representing a 25% growth over Q1. “Compared to the corresponding period last fiscal (Q2 FY20) our business grew by over 40% when transactions worth INR 23KCr were processed,” CFO Ketan Merchant said.
What Helped Fino Grow During The Pandemic?
The key business drivers for Fino continued to be its liability products — Micro ATM, AePS transactions, remittances, payment services partnerships, insurance (life, health including Covid19, motor), and gold loan referrals for partner banks. The company currently processes transactions worth INR 12,500 Cr per month for these products, noting a 4% month-on-month growth.
The company also noted that the urban to rural domestic remittance business took the biggest hit during the initial days of lockdown due to a drop in wages of migrant workers, but it bounced back growing 80% in Q2 of FY2021 to INR 6,400 Cr from INR 3,540 Cr in Q1. Besides this, the company also noted a spike in gold loans.
In addition to the regular products, Fino Payments Bank had also introduced subscription-based new savings products targeted at specific customers including minors. The product alone helped Fino add close to 3 Lakh users in Q2. Overall, the company has a total user base of 25 Lakh.
In FY2021, the company claims to have created entrepreneurship and employment opportunities for about 85,000 local shop owners, with 50% of them being onboarded in Q2FY21. It has also increased its banking points by 1 Lakh to 3 Lakh in Q2 compared to Q1. Of this, about 8000 outlets of Fino Payments Bank are located in the Bharat Petroleum (BPCL) owned properties.
In addition, the company further claims to have 2.5 Lakh points through its partners, making the total network at around 5.5 Lakh. It now plans to increase the network to 10 Lakh (1 Mn) outlets over the next 3 years.
Fino Payments Bank was founded in 2017, and has managed to turn profitable in the short span of three years. The company competes with BANKIT, PayNearby, Paytm Payments Bank, Airtel Payments Bank, Jio Payments Bank and others.
