Riding out the storm with compassion
I am happy to communicate with you once again through this Annual Report. Before Idelve deeper into our performance for the year gone by it is crucial to outline theexternal environment in which we currently operate in. India and the world faced anunprecedented health crisis in the form of COVID-19 which quickly turned into an economicone. As a nation we prioritised life over everything else at the onset of the pandemicand focused on providing immediate relief to the economically vulnerable sections.
The willingness to take short-term pain for long-term gain was apparent in thegovernments counter measures. The pandemic also emphasised the importance of thehealthcare sector and its_ inter-linkages with other sectors. However more than a yearinto the crisis Indias economic prospects remain highly uncertain as the recentsurge in infections and the consequent localised lockdowns have dampened sentimentsthereby delaying the return to normalcy. That said the vaccination drive has gatheredmomentum and is key to a sustained economic recovery.
I hope you and your loved ones are safe healthy and vaccinated.
My prayers and good wishes are with you all. Stay safe and healthy at all times.
The Banks business was impacted due to the lockdown since the end of March 2020.We kept most of our branches and ATMs operational during this period to deliveruninterrupted services to our customers. We also believed that our customers shouldconserve cash to ensure that they had enough liquidity to tide over this pandemic and thelockdown and to kick-start their business as the lockdown eased. In keeping with thisbelief opting for a moratorium was a default mode that we rolled out. If anyone wanted toopt out of the moratorium they could reach out to us. This made it convenient for ourcustomer segments. The Bank extended the moratorium benefits to as much as 98% of itscustomers during the first phase and exited the moratorium period with only 35% ofadvances under moratorium as of August 2020.
"We emerged out of the first wave of the pandemic relatively unscathed because ofour customers who demonstrated incredible resilience in the face of supposedlyinsurmountable adversity."
We emerged out of the first wave of the pandemic relatively unscathed because of ourcustomers who demonstrated incredible resilience in the face of a supposedlyinsurmountable adversity. Indias micro enterprises continue to show resiliencevigour and determination to bounce back from such situations. We thank them for theirsupport and contribution in building our nation.
Since the end of the moratorium period in August 2020 our sustained prioritisation ofcollections over growth is ebbing forward flows stabilising delinquent loan buckets andcontrolling new stress.
"The Banks demonstrated track record across economic cycles and major eventsvalidate its unwavering focus on building a stable scalable and sustainable Bank."
The Bank ended the year with a 17% YoY growth in advances and a 58% growth in deposits.The Banks investments in branch banking liabilities team and digital channelscoupled with attractive deposit pricing are yielding results.
The Banks focus on digitalisation continues and its Fintech collaborations havestarted off well. The Bank is seeing growing interest among Fintechs to collaborate andaccordingly has strengthened its API banking platform. The Bank continues its journey ofrevamping the technology stack for the asset businesses to make the Bank future proof anddigitally ready in anticipation of the change in customer behaviour as smartphones anddata become more affordable.
I am happy to inform you that our strategy of diversifying and offering a wide array offinancing solutions to the segments that we operate in continue to progress well. TheBanks demonstrated track record across economic cycles and major events validatesits unwavering focus on building a stable scalable and sustainable Bank.
Our people philosophy rests on the pillars of Employee Care and Employee Connect.Equitas needed to create a safe environment for its employees to deliver their fullpotential. This two-pronged approach held us in good stead especially during the pandemicgiving confidence to the employees. The Bank launched a first-of-its-kind COVID packagefor its employees. The package attempts to provide holistic assistance to its employeesand their immediate family.
As I had indicated in my last address the Bank had to be listed separately by the endof the third year of starting its journey as an SFB. For us the deadline was September 42019. The IPO was scheduled around the end of March 2020. Unfortunately the listing ofthe Bank had to be put on hold due to the COVID-19 outbreak. As normalcy in businessoperations resumed the Bank initiated steps to complete the IPO and got listed on the NSEand the BSE on November 2 2020. Consequent to the IPO process Equitas Holdings Limitedreceived cash as part of the offer for sale (OFS) proceeds and paid out dividend toshareholders.
Our social initiatives such as free health camps livelihood skills training and jobplacement fairs for unemployed youth continue to create a difference. Eight EquitasGurukul schools (seven owned schools and one managed school belonging to VSKD Trust) arefunctioning well under the aegis of Equitas Development Initiatives Trust (EDIT). Theschools provide high-quality affordable education to 5700 students from low-incomehouseholds.
Since inception we have believed that as more people gain access to formal tools tomanage their money their ability to build assets not only improves the welfare of theirhouseholds but also sets in motion a virtuous cycle of societal progress. Today we arewitness to thousands of success stories of our customers who save and borrow small amountsof money while building financial assets and creating a formal financial footprint. Weremain committed more than ever to being a catalyst in the convergence of increasingincome and evolving access and affordability of financial services.
The Board and I personally thank our investors and other stakeholders for theircontinued interest in us. I thank you all for being part of this exciting journey and formaking Equitas what it is today. I also seek your continued support in staying true to ourvalues of fairness and transparency.
God bless you.