Fino Payments Bank’s Q2 PAT Zooms 41% YoY To INR 19.5 Cr

Fino Payments Bank’s consolidated profit after tax (PAT) jumped 41.5% year-on-year (YoY) to INR 19.5 Cr in the second quarter (Q2) of the financial year 2023-24 (FY24) on the back of strong growth in transactions and user base. The payments bank had reported a PAT of INR 13.8 Cr in Q2 FY23. 

Sequentially, the company’s net profit increased 4.3% from INR 18.7 Cr. 

The payments bank’s revenue increased 18.2% to INR 358.6 Cr in Q2 FY24 from INR 303.3 Cr in Q2 FY23. On a quarter-on-quarter (QoQ) basis, revenue rose nearly 3% from INR 348.3 Cr in Q1 FY24. 

Meanwhile, expenses continued to rise largely on the back of ‘other operating expenses’. Fino Payments Bank’s total expenditure, excluding provisions and contingencies, grew 16.9% to INR 338.50 Cr in Q2 FY24 from INR 289.5 Cr in the year-ago period. 

While ‘other operating expenses’ soared more than 15% YoY to INR 275.6 Cr in the quarter ended September 2023, employee benefit expenditure also saw a marked rise of more than 15% YoY to INR 44.05 Cr in the quarter under review. 

Speaking to Inc42, Fino Payments Bank’s chief financial officer (CFO) Ketan Merchant said that product costs coupled with ecosystem challenges, including the Aadhaar Enabled Payment System (AEPS) chargeback costs, added to the expenditure. He, however, expects operational leverage to kick in to offset these challenges. 

The Fino CFO also added that the company continues to be agile, focussed on the variablised cost model and is running a tight ship to manage costs. 

Meanwhile, earnings before interest, taxes, depreciation, and amortisation (EBITDA) zoomed 51.4% on a yearly basis to INR 46.2 Cr in Q2 FY24. 

“Our performance in the first half of the fiscal has been in line with our expectations wherein on the back of digital push we have registered another record on throughput of ~ INR 1.62 Lakh Cr…Our focus on profitability is driving PAT margin upwards from 4% in H1 FY23 to 5.4% in H1 FY24…,” added Merchant. 

Merchant further added that the payments bank is ‘committed’ towards achieving a growth rate of nearly 20% in revenue going forward and will continue to enhance its digital presence. 

Merchant also said that the payments bank is ahead of the curve in terms of digital adoption compared to its peers.

Meanwhile, the company confirmed that it plans to apply for the planned small finance bank (SFB) licence by the end of the current year.

On the operational front, Fino reported an overall throughput of INR 86,568 Cr in Q2 FY24, up 43% YoY, while digital throughput soared 120% YoY to INR 23,051 Cr during the quarter. Interestingly, digital throughput accounted for 27% of overall throughput in Q2 FY24, up from 17% in Q2 FY23.

The payments bank also logged nearly 37 Cr UPI transactions, accounting for 1.25% of the overall ecosystem count. 

It also deepened its distribution network as the number of merchants registered on the platform soared 23.4% YoY to 15.1 Lakh at the end of September 2023. In addition, 15.4 Lakh bank accounts were opened in the first six months of the current financial year so far.

With overall current customer base hovering around the 90 Lakh mark, the payments bank opened nearly 50,000 digital accounts in the quarter. 

At the end of the quarter, the total number of CASA (current account.savings account) stood at 90.6 Lakh while product mix substantially improved in favour of high margin products such as CASA and CMS. The two main products – CASA and CMS – accounted for 30% of Fino’s total revenue in Q2 FY24.

Average deposits zoomed 53% YoY to INR 1,267 Cr in Q2 FY24 compared to INR 830 Cr in Q2 FY23.

Shares of Fino Payments Bank closed 2.21% higher at INR 305.30 on the BSE on Wednesday (November 1).