After a lukewarm public debut, Fino Payments Bank posts 74 pc growth in profit in July-Sept

Fino Payments Bank, which debuted its public listing on Indian bourses on Friday, posted a 74 percent year-on-year growth in its Profit After Tax (PAT) with Rs 7.89 crore in Q2FY22 ending September 30, 2021, as compared to Rs 4.52 crore in Q2FY21.

On a quarter-on-quarter basis, the profit growth has been 152.07 percent in September 2021 quarter as compared to Rs 3.13 crore in June 2021 quarter.

The payments bank platform has facilitated more than 435 million transactions with a gross transaction value of Rs 1.33 lakh crore in the financial year 2020-21. The fintech bank turned profitable in the fourth quarter of 2019-20 and has been profitable in subsequent quarterly periods. The bank registered a profit of Rs 20.5 crore in 2020-21.

The Q2FY22 financial results also revealed that the company's revenue grew by 35 percent YoY at Rs 242.15 crore on the back of a growth of 32 percent in transaction revenue, 43 percent in subscription income, and 35 percent in open banking. It recorded a jump of 56 percent YoY in new current and savings accounts opened during the quarter.

Fino's total operating expenses including product costs grew by 36 percent YOY in Q2FY22, primarily due to an increase in product costs and manpower costs on account of ramping up of feet on the street team.

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On its financial performance, Rishi Gupta, CEO and Managing Director, said,

“Our growth momentum in transaction volumes and throughput continues to be strong. Consumer behaviour towards convenience banking is gaining impetus. To add to that, traction on our UPI platform is also heartening as it reinstates our belief of digitization as the future of India. Our endeavour is to digitally include all Indians in the financial ecosystem. I thank our customers, business partners, all our merchants, investors and colleagues for continued and valuable support as we embark on a new path.” 

In Q2FY22, Fino onboarded 13 new partners in cash management services (CMS)/ payment services resulting in total CMS clients at 110 (86 percent YOY growth) as of September 2021 end.

In a statement, Fino added that the bank’s focus on transactions helps capitalise on the opportunities that would arise as banking adoption in the emerging India market increases and the economy gains momentum. Fino's UPI throughput grew by 403 percent to Rs 5,854 crore in H1FY22 over H1FY21.

Ketan Merchant, Chief Financial Officer, said, “Investment in technology and operating leverage is beginning to yield results. Our strategy to focus on growth resulted in ramp up our feet on street teams. However, our revenue per employee has grown in Q2FY22 resonating with our philosophy of focus on growth and profitability. With an annualised ROE of 20 percent in Q2FY22, our model is poised for long term outperformance. Alongside the growth in our existing businesses, our digital journey in Fino 2.0 will help us tap a massive potential of cross-sell in the near future.”

The shares of Fino Payments Bank made a tepid market debut on Friday, listing with a discount of nearly 6 percent from its issue price of Rs 577. The stock made its debut at Rs 548, a decline of 5 percent from the issue price on the BSE. It later dipped 7.15 percent to Rs 535.70.

At the NSE, it listed at Rs 544.35, lower by 5.65 percent. The initial public offer of Fino Payments Bank Limited was subscribed 2.03 times earlier this month. The Rs 1,200.3-crore IPO had a price range of Rs 560-577 per share for the offer.

Fino Payments Bank or FPBL is a scheduled commercial bank serving the emerging Indian market with its digital-based financial services. The company is a fully-owned subsidiary of Fino Paytech, a pioneer in technology-enabled financial inclusion solutions.