Fino Payments Bank Q1: Profit Declines 27% To INR 17.7 Cr

Fino Payments Bank’s net profit for the quarter ending June 2025 (Q1 FY26) fell 27.4% to INR 17.7 Cr from INR 24.3 Cr in the same period last fiscal year. Sequentially, profit fell 26.2% from INR 24 Cr in Q4 FY25.

The payments bank’s income from interest rose 34.4% to INR 60.9 Cr from INR 45.3 Cr in the year ago quarter. On a QoQ basis, interest income increased 15.3% from INR 52.8 Cr.

Other income for the period under review stood at INR 392.5 Cr, almost flat compared to INR 391.5 Cr in the year-ago quarter. Sequentially, it declined 10.9% from INR 440.7 Cr.

Including other income, total income for the period rose 3.8% to INR 453.5 Cr from INR 436.8 Cr in the previous year.

The reason for the decline in profit was a rise in tax expense. The payments bank’s tax outgo stood at INR 68.7 Cr during the quarter under review as against nil in the year-ago quarter.

Meanwhile, total expenses grew 3.9% to INR 428.8 Cr in Q1 FY26 from INR 412.6 Cr in the previous year. On a QoQ basis, the company’s expenses declined 1.8% from INR 436.8 Cr in Q4 FY25.

Fino Payments Bank earns revenue primarily from three streams – retail banking, treasury and other banking operations.

During the period under review, it earned INR 119.6 Cr from retail banking, INR 60.4 Cr from treasury and about INR 272.8 Cr from other banking operations.

Its cost-to-income ratio, which reflects how much it spends to earn revenue, rose to 28.1% from 25.4% last year. Net revenue margin, on the other hand, improved to 33.5% from 31% in the year-ago quarter.

This improvement was largely due to a change in the payments bank’s business mix, with a greater share of revenue now coming from digital and deposit-led services.

Fino Payments Bank reported steady growth in its core business areas. Average customer deposits increased 34% YoY to INR 2,275 Cr. The number of digitally active customers reached 53 Lakh at the end of June 2025, and digital services accounted for 23% of the total revenue as against 20% a year before.

The payments bank processed nearly 1 Cr UPI transactions daily in Q1 FY26, a 54% rise from last year.

Customer account renewals also grew, with income from CASA (Current Account and Savings Account) renewals rising 38% YoY to INR 55.9 Cr. Its merchant network expanded to 19.5 lakh outlets at the end of June 2025, covering 97% of India’s pin codes.

However, not all areas showed positive momentum. The payments bank’s traditional services, such as cash remittance, micro-ATM transactions, and Aadhaar-enabled payments, were hit hard by regulatory changes and a shift in consumer preferences towards digital channels. Revenue from these services fell 43% YoY.

Notably, Fino Payments Bank is currently undergoing a transition. It plans to move to a new core banking system during the ongoing financial year and continues to invest in compliance, particularly in areas like transaction monitoring and anti-money laundering.

It has also applied for a small finance bank licence from the Reserve Bank of India.

Shares of Fino Payments Bank ended today’s trading session 1.46% lower at INR 259.55 on the BSE.

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