Fino Payments Bank chief draws up blueprint for aggressive growth in digital, cash management business

In a post results conversation, Gupta said that the bank in the first quarter of fiscal 2025 reported robust growth across segments except the cash management services (CMS) which saw some pressure on margins.

Fino Payments Bank plans to look at growing cash management and its digital business across segments more aggressively in fiscal 2025, Managing Director and Chief Executive Officer Rishi Gupta told Moneycontrol. In a post-results conversation, Gupta said that the bank in the first quarter of FY2025 reported robust growth across segments, except the cash management services (CMS), which saw some pressure on margins.

“On the business-to-business side, we are seeing a substantial growth coming on the unified payments interface (UPI) ecosystem on the digital platform. In CMS, we have seen a 26 percent growth and there is a marginal dip in the margin percentage because of the change in the client mix within the portfolio. So, largely, I think we will continue to push on CMS, digital and transaction business,” Gupta said.

He added that the bank will also look at growing its current account and savings account (CASA) business. “We will continue to push on account opening, renewal income, building on liabilities, when we look at CASA accounts,” Gupta added.

More details from the conversation:

What do you make of your Q1FY25 results?

If you look at the total revenue, it has grown by 25 percent on a year-on-year (YoY) basis and 9 percent sequentially against our earlier guidance of 20 percent and now we are saying 25 percent for this year.

On top of it, our, on a quarter-on-quarter basis, while there is a 9 percent revenue growth, there is a marginal dip in the earnings before interest, taxes, depreciation, and amortisation (EBITDA) and the profit before tax (PBT), largely because of the new year when it starts, new salaries, increments, new contracts, etc. And when compared to our last three years of drop in profit after tax (PAT) and EBITDA, the drop this year is very marginal.

How was your merchants business in this quarter?

The merchant ecosystem is our biggest driver for business and that gets us the customer accounts, the cash management services, as well as the transaction business. If I add three-four of those items, it constitutes nearly 70 percent of our overall revenue for the company.

And what about CASA and CMS?

If I look at our CASA numbers, it has grown in the last year. So, on the whole basis, we are quite positive in terms of growth, which we are seeing. In fact, on the CASA numbers, it has grown by 38 percent in the last one year and deposit has grown 37 percent.

Our CMS business has also grown 26 percent. The transaction business has seen some decline because of the movement on the digital side.

So which business segments would want to focus more in this fiscal?

We are finding growth from all businesses, whether it is merchant, or digital. The transaction business itself is growing, but digital business is largely the business-to-business digital revenue. We are also seeing substantial growth coming on the UPI ecosystem on the digital platform. We will continue to push on account opening, renewal income, building on liabilities, when we look at CASA accounts, CMS, we have seen a 26 percent growth on the CMS and there is a marginal dip in the margin percentage because of the change in the client mix within the CMS portfolio.

So, largely, we will continue to push on CASA, CMS, digital and transaction business.

Any update on your SFB application from the RBI?

We are pushing a lot on the technology side in terms of building up a new technology framework which will help us when we get into the lending portfolio. We are also peddling a lot more on the liability side.

So, we will see how all these things go as we await the regulator's feedback on our application for SFB licence.