Fino Payments Bank Reports Q1 Net Loss Amid Digital Payments Shift

Fino Payments Bank registered a net loss of Rs 13.7 crore for the first quarter of the current fiscal year, a notable reversal from the Rs 17.8 crore net profit recorded in the same period last year.

This financial downturn is primarily attributed to a strategic recalibration of its Digital Payments Services, specifically the B2B UPI P2M vertical, alongside persistent pressure on its cash-driven transaction business.

Operational Metrics and Digital Shifts

Despite the overall decline in profitability, the bank’s Net Interest Income (NII) saw a 13.1% year-on-year increase, reaching Rs 36.9 crore. The net revenue margin expanded to 42.8%, supported by the high-margin CASA segment, which now constitutes 54% of the mix. The Ebitda margin held steady at 14%.

Total throughput for the bank decreased by 10% year-on-year, though it marked a 3% sequential increase to Rs 1.11 lakh crore. In contrast, UPI throughput demonstrated positive momentum, growing 14% year-on-year and 2% sequentially to Rs 60,100 crore, indicating increased digital engagement.

The Digital Payments Services remained non-operational during the quarter due to the ongoing strategic recalibration. The transaction business, encompassing remittance, MATM, and AePS, experienced a significant 50% year-on-year revenue decline and a 44% fall in throughput, largely influenced by UPI’s broader adoption.

Strengthening Liability and Future Ventures

Fino Payments Bank strengthened its liability franchise, with its CASA customer base increasing 22% year-on-year to 1.83 crore, adding 8.4 lakh new accounts. Average total deposits grew 12% year-on-year, reaching Rs 2,772 crore.

Renewal income remained robust, climbing 7% year-on-year to Rs 67.5 crore. The Cash Management Services (CMS) segment showed a recovery with a 26% sequential throughput increase, despite facing pricing pressures from competitors.

The bank’s loan referral business, operating as a pilot for its prospective small finance bank, witnessed disbursals surge by 214% year-on-year to Rs 628 crore. This figure accounts for nearly half of the total disbursals recorded in fiscal 2026, highlighting significant growth in this segment.

Fino Payments Bank’s first-quarter performance reflects the challenges of recalibrating digital payment strategies while navigating a competitive landscape, even as its core liability and loan referral segments show growth.