Equitas SFB to add 409 branches by June 2017

The company is expected to invest around Rs 120 crore in branch infrastructure, said Equitas MD

Equitas Small Finance Bank (ESFBL) has said it started operations with three new liability branches. Plans are underway to add the balance 409 by First quarter of Fiscal 2018. It will invest around Rs 120 crore on the branch infrastructure, while most of its estimated Rs 100 crore investment has been spent on IT.

P N Vasudevan, managing director, Equitas Small Finance Bank said that ESFBL has commenced its banking operations on September 5, 2016 with three branches in Chennai. By end of June 2017, all the 409 branches will start operations.

He added, the Bank almost spent Rs 100 crore to put up IT systems and will be investing around Rs 120 crore to set up the branches.

 

Of the 409 branches, 50 per cent will be in South, 30 per cent will be in West and 20 per cent in South.

Vasudevan all the investment will be funded through internal accruals, as the Bank has got Rs 2,000 crore capital. Currently, Equitas has 9,000 staff and expect to increase this to 12,500 once the branch expansion completes.

While the existing branches have started accepting deposits, it has not started accepting CASA from the public, which it hopes to start from November.

So far the it has got Rs 12 crore deposit and 230 clients.

ESFB, which is the first private-sector bank from Tamil Nadu to commence operations post Indian Independence, is a diversified financial services provider focused on individuals and micro and small enterprises (MSEs). The focus customer segment includes low income groups and economically weaker individuals operating small businesses.

S Bhaskar, Executive Director & Chief Executive Officer, Equitas Holdings Limited, said that "as we have transformed into the Bank, we continue to remain focussed on the segments not sufficiently serviced by the mainstream financial system. To a large percentage of our borrowers, we are the only lenders. We hope to impact about five per cent of Indian Households by 2025,"

To enable physical support to its millions of customers, Equitas plan to have a network of Business

Correspondents (BC) at branch level taking banking services right to the doorstep of its clients.

The company has deployed IT and digital solutions to make our banking experience a great experience for its mass and mass affluent customers.

Total assets under management of ESFBL during the second quarter ended Fiscal 2017 stood at Rs 7,079 crore and networth stood at Rs 1,960 crore. The bank's PAT stood at Rs 47.1 crore.

One-time bank transition impact is on account of pre-closure charges on term loans repaid, NPA transition to 90 day norms, negative carry on cash held prior to bank conversion while credit is on account of standard assets provision reversal on incremental asset growth in first half of 2016-17 over the fourth quarter of fiscal 2016.

Recurring impact is on account of staff cost, rent & related costs to the extent incurred, depreciation on core banking & related IT assets, negative carry on SLR & CRR, advertisement & brand promotion etc., while credit is on account of reversal of Treasury Income.

Equitas said during the second quarter total impact on PAT was Rs 24.05 crore, including one time impact, net of Tax of Rs 13.41 crore and recurring impact, net of tax of Rs 10.64 crore. During the first quarter total impact on PAT was Rs 3.27 crore, which was recurring impact, net of tax.