Fino Payments Bank registers profit for the third straight quarter

Bank achieves transactions worth Rs 12,500 cr, twice that in the same month last year; eyes conversion into SFB following

Riding the surge in digital transactions due to Covid-19, Mumbai-based Fino Payments Bank has registered a profit of Rs 4.5 crore in the quarter ending September, 2020. This is the third consecutive quarter that Fino has registered profit, starting from Q4 of last financial year.

“In the last one-and-a-half years we started to see a change in consumer behaviour, wherein we saw them coming to merchant and digital channels, which got further accentuated because of covid. In October, we did more than Rs 12,500 crore worth of transactions, which is twice of what we did in the same period last year,” said Rishi Gupta, MD & CEO, Fino Payments Bank speaking to Business Standard.

Another factor has been the company’s change in direction from focusing mainly on remittances to other high margin products. “Till last year, we were heavily dependent on remittances, and it took a hit because of covid. Hence, we reconfigured ourselves and started to focus on other products as well,” Gupta said. “We have been able to do a lot of high margin products such as micro ATMs, AePS, payment service products, CASA account opening,” he added.

Fino Payments Bank has expressed a desire to convert into a small finance bank. And, the recent recommendations of Reserve Bank of India (RBI), which has said payments banks that intend to convert into small finance banks can do so with three years’ experience instead of five, will certainly benefit Fino, which started operations in July 2017, if the recommendations are accepted by RBI.

“Nearly 40 million customers transact with us on a monthly basis. When we look at our customer segment, there is an inherent demand for credit. The idea of a small finance bank will help us to offer credit to our customers, merchants, and to the ecosystem where we are working”, Gupta said.

“Our basic business will continue the way we are growing and it will be largely a transaction business on which will be adding credit as a product. So, we will have to evaluate the guidelines on the small finance banks that will come up finally. Post that, we will be able to take a view on how soon can we apply. On the face of it, it looks like an attractive proposition to add credit to our list of products”, he added.

In Q2 FY21, the company’s network facilitated transactions worth Rs 33,000 crores, registering a 25 per cent growth over Q1 FY21, and over 40 per cent growth in the corresponding period last year. It is also disbursing gold loans by tying up with banks and has also added insurance products, mainly non-life products, to its kitty.
 

Fino has around 5.5 lakh merchant points and has added 90,000 merchant points in the first six months of this financial year. Their target is to take it to 10 lakh merchant points in the next 2-2.5 years. “We are adding 1-1.5 million customer on an annualized basis. Our target is to grow that to 2-2.5 million on an annualized basis, going forward”, Gupta said.

Fino Payments Bank is backed by private equity firm Blackstone, ICICI group, and Bharat Petroleum. The bank may not require too much of capital at the payments bank level. “But if we convert into a small finance bank then we will require capital,” Gupta said.