Fino Payments Bank’s Q2 PAT Zooms 75% YoY To INR 13.8Cr, Revenue Up 25%

Mumbai-based Fino Payments Bank reported a profit after tax (PAT) of INR 13.8 Cr in the second quarter (Q2) of the financial year 2022-23 (FY23). On a quarterly basis, the number was 36% higher, while PAT grew 75% on a year-on-year (YoY) basis.

Revenue grew 25% YoY to INR 303.33 Cr in Q2FY23, compared to INR 242.15 Cr during the corresponding period last year. 

“This quarter marks completion of 21 quarters in our banking journey and I’m amazed to see the progress we have made since the Bank’s inception in 2017. Our continuous focus on growth and profitability has given us good dividends. The strong performance during the first half of FY23, even in the midst of macroeconomic challenges, makes us confident of a strong H2 FY23,” said Fino Payments Bank chief executive officer (CEO) and managing director Rishi Gupta.

Key Takeaways From The Q2 FY23 Financials

• Net revenue margin improved from 30.3% to 30.9% on QoQ basis
• Subscription revenue jumped 30% in the quarter, compared to 25% Q1 FY23
• Merchant count jumped 51% YoY to 12.25 Lakh
• 7.6 Lakh new bank accounts were opened during the period, up 54% compared to the corresponding quarter last year
• Total account base stood at 59.5 Lakh in Q2 FY23
• Total deposits with the Fino Payments Bank grew 77% YoY at the end of quarter
• Bank’s overall throughput value grew by 40% YoY to INR 60,552 Cr 
• High margin products namely Current Account Savings Accounts and Cash Management Services contributed 26% of revenue in Q2FY23, up from 16% in Q2FY22

Operating costs during the quarter that ended September 2022 surged more than 20% to INR 277.73 Cr, up from INR 230.83 Cr in Q2 FY22. 

This was largely led by an increase in ‘other operating expenses’ to INR 239.48 Cr, up 21% from INR 197.89 Cr in Q2 FY22. Employee expenses also rose substantially by 16% to INR 38.25 Cr in Q2 FY23, compared to INR 32.94 Cr during the corresponding period last year. 

Fino Payments Bank’s earnings before interest, tax, depreciation and amortisation (EBITDA) stood at INR 30.5 Cr in the second quarter of the current financial year, up 71% YoY. Similarly, EBITDA margins widened to 10.1% in Q2FY23, from 7.4% in Q2FY22.

“Q2 was another quarter of solid execution and we continue to progress on our growth and profitable journey. Our business model is structured to generate disproportionate bottom line growth due to operating leverage play as evident in Q2 FY23 PAT margin. We are confident that our well-invested infrastructure and our high margin product growth will give us a unique financial edge in H2 FY23 and beyond,” said chief financial officer (CFO) Ketan Merchant.

The payments bank also said that it has appointed Prateek Roongta as a Nominee Director of the parent company, Fino PayTech, on the Board of the Bank. The decision was taken based on the recommendation of the Nomination and Remuneration Committee and was approved by the company’s Board. 

Founded in 2006 by Manish Khera, the startup began operations as Fino PayTech and was later granted an in-principle approval to set up a payments bank in September 2015. The payments bank commenced its operations in June 2017.

It largely competes with payment banks operated by India Post, Bharti Airtel, Paytm, NSDL, Reliance Jio and others. While the results were declared late into the night, shares of the fintech startup closed nearly 1% higher at INR 203.25 on the BSE on Monday (October 31).