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Mumbai-based Fino Payments Bank’s profit after tax (PAT) fell more than 42% quarter-on-quarter (QoQ) to INR 10.10 Cr in the first quarter (Q1) of the financial year 2022-23 (FY23). On a year-on-year (YoY) basis, the PAT was 223% higher. 

The fintech startup attributed the QoQ decline in PAT to expensing of digital investments.

Its revenue grew 1.3% QoQ and 40% YoY to INR 289.05 Cr during the June quarter, while operating cost rose 6.5% QoQ and 7% YoY to INR 63.97 Cr.

It must be noted that the corresponding quarter of the previous year was affected by COVID-19. 

Fino Payments Bank’s earnings before interest, tax, depreciation and amortisation (EBITDA) stood at INR 23.6 Cr in Q1 FY23 as against INR 29.42 Cr in the preceding March quarter. EBITDA margin contracted to 8.2% from 10.3% in Q4 FY22.

“The quarter ended marked the tenth straight quarter profit. And with it half of our five year existence as a payments bank has been profitable….We will continue the momentum with emphasis on customer acquisition strategy and I am confident of our next growth phase driven by high growth products and digital initiatives,” Fino Payments Bank CEO and MD Rishi Gupta said.

Overall, the startup said that its non-digital throughput value crossed the INR 50,000 Cr mark for the first time, recording a non-digital throughput of INR 60,784 Cr in Q1 FY23. 

It recorded 25 Cr transactions on its various platforms in Q1 FY23, growing 102% year-on-year (YoY). More than 6.2 lakh users were enrolled on its banking platform, surging 83% compared to the same period of last year. Total merchant base also grew 12% in Q1 FY23 to 11.42 Lakh, led primarily by a big spurt in numbers in Uttar Pradesh, Bihar, Madhya Pradesh and Maharashtra.

“…Our endeavour is to leverage the 1.14 Mn  strong network and dovetail our digital strategy to enhance cross sell opportunities in the long run for stakeholder value creation”, Fino Payments Bank CFO Ketan Merchant said.

The payments bank’s total deposits grew 131% YoY to INR 581.53 Cr, while average deposit balance grew 29% YoY to INR 1,116 Cr during the same period. Total debit card spending by its customers surged 82% YoY to INR 1,521 Cr in Q1 FY23. 

Fino Payments Bank’s total account base stood at 52.1 Lakh in Q1 FY23. Of this, 33% accounts were active on digital payments.

The quarter also saw the unicorn continue its shift towards high-margin products such as current and savings account (CASA) and cash management services (CMS). The two products together cumulatively contributed 21% of the overall revenue.

The startup also said that it has reappointed Gupta as CEO and MD for another three years from May 2023 to May 2026. In addition, Rakesh Bhartia was appointed as an independent director within the firm for a period of five years till July 2027.

Founded in 2006 by Manish Khera, the startup began operations as Fino PayTech and was later granted an in-principle approval to set up a payments bank in September 2015. The payments bank commenced its operations in June 2017. 

Fino competes with payment banks operated by India Post, Bharti Airtel, Paytm, NSDL and Reliance Jio, among others. Shares of the fintech startup ended 1.52% higher at INR 260.55 apiece on the BSE on Wednesday.