Shares of Fino Payments Bank climbed about 5 percent in morning trade on July 31 after the company reported an 85 percent jump in net profit to Rs 19 crore for the June 2023 quarter on treasury gains.
Shares of Fino Payments Bank were trading 4.93 percent up at Rs 360.85 on the BSE at 10.35 am.
The company’s board has approved a proposal to transition to a small finance bank, it said in a post-market hours exchange filing on July 28.
The payments bank also stated that they have also constituted a committee to explore the possibility of group corporate restructuring and evaluate its implications and other considerations.
“Pursuant to approval of RBI, the Bank will get benefits from the small finance bank business as permitted under the Guidelines for 'on tap' Licensing of Small Finance Banks in the Private Sector…,” it added.
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For the reporting quarter, its total income grew to Rs 348 crore from Rs 289 crore in the year-ago period, which included a more than doubling of the income on investments at Rs 25 crore.
It reported an operating profit of Rs 23.28 crore from the treasury segment against Rs 13.38 crore in the year-ago period.
At an entity level, the operating profit margin widened to 11.6 percent from 8.2 percent a year ago, it said.
It had 14.4 lakh registered merchants and 82.9 lakh current and savings accounts as of June.
The bank, which added 2.5 lakh customers per month in FY23, saw 7.7 lakh bank accounts being opened during the reporting quarter.
"We intend to supplement payments bank business with lending to known customers through enhancement of license," its managing director and chief executive Rishi Gupta said, adding that the opportunity is significant given its network.
Earlier, on June 26, in an exclusive interview with Moneycontrol, Ketan Merchant, the Chief Financial Officer, indicated that they will jump into the small finance bank segment soon.
"However, converting into an SFB is an option the regulator has provided to some payment banks. With credit as a product offering, there will be a positive impact on customer engagement and overall business. In this context, we have the intent and are working internally on it. We have not put any timeline for applying, though," Merchant had said.
Shares of Fino Payments Bank are up 43 percent on YTD basis, while the 1-year return stands at 35 percent.
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