ESAF Small Finance Bank Reports Q2 FY27 Net Profit of ₹160 Crore

ESAF Small Finance Bank announced its highest-ever quarterly profit of ₹160 crore for Q2 FY27, recovering from a net loss of ₹116 crore in the same period last year. The financial turnaround was driven by growth in gross advances, a heavier focus on secured lending, and a notable improvement in asset quality.

ESAF Small Finance Bank has announced its financial results for the second quarter of fiscal year 2027, reporting a net profit of ₹160 crore. This marks the bank's highest-ever quarterly profit, representing a complete turnaround from the net loss of ₹116 crore recorded in the corresponding quarter of the previous fiscal year.

According to the bank's official release, the performance was underpinned by robust business growth, improved operating efficiency, a stronger secured lending portfolio, and a substantial improvement in asset quality.

As of September 30, 2026, gross advances registered a 25 per cent year-on-year growth to reach ₹23,934 crore. The bank's strategic focus on secured lending was reflected in a 32 per cent increase in secured advances, which rose to ₹15,377 crore and now account for 64 per cent of the total advances portfolio. Within this segment, the gold loan portfolio recorded a 39 per cent growth, touching ₹10,456 crore and representing approximately 44 per cent of total advances.

The bank also reported a marked strengthening of its asset quality metrics. Gross non-performing assets (GNPA) declined significantly to 2.8 per cent as of September 30, 2026, compared to 8.5 per cent in the previous year. Similarly, net non-performing assets (NNPA) improved to 0.3 per cent from 3.8 per cent over the same period.

Commenting on the results, K Paul Thomas, Managing Director & CEO of ESAF Small Finance Bank, stated that Q2 FY27 marks an important milestone in the bank's transformation journey. He highlighted the record quarterly profitability, strong business growth, and significant improvement in asset quality, noting that the strategic focus on building a diversified and increasingly secured portfolio is progressing well with secured advances now forming 64 per cent of total advances.

"ESAF Small Finance Bank’s strong financial turnaround in Q2 FY27 highlights the effectiveness of a deliberate strategy focused on asset quality and secured lending. Moving from a net loss to a record profit while simultaneously lowering gross and net NPAs demonstrates solid risk management. For financial institutions in the Indian ecosystem, scaling the loan book responsibly by increasing the share of secured portfolios—such as gold loans—remains a reliable pathway to achieving sustainable profitability." — Dr. Shishir Gupta, Founder & CEO, StartupLanes