Fino Payment Bank Q2 Review - Sequential Improvement Across The Board; Sustainability Is Key: ICICI Securities

ICICI Securities Report

Fino Payment Bank Ltd.’s Q2 FY23 financial performance showed improvement across business parameters as reflected in 36% QoQ growth in earnings at Rs 138 million –driven largely by 60 basis points QoQ gross profit margin expansion and benefits of operative leverage.

Gross revenues grew 5% QoQ while total operating expenses rose only 2% QoQ. As a result, cost/income ratio moderated to 95% versus 97% in Q1 FY23.

Strong revenue growth and operating leverage benefits led to 100 bps QoQ profit after tax margin expansion to 4.5% during Q2 FY23 versus 3.5% in Q1 FY23.

Fino Payment Bank's margin expansion was primarily driven by strong 66% QoQ growth in current account and savings account revenues (margin at 58%), 16% QoQ growth in cash management services revenues (margin at 40%) and higher share of revenues from own banking channel at 64% during Q2 FY23 versus 62% in Q1 FY23.

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