SFBs' Q1 net profit slumps 76% to ₹309 crore as credit costs rise

Small Finance Banks reported a 76 per cent drop in Q1 net profit as provisions surged and net interest income weakened, while gross NPAs jumped nearly 70 per cent year on year

Rising stress in small-ticket loans and MSMEs hit the bottom line of Small Finance Banks (SFBs) in the first quarter ended June 2025 (Q1FY26). Their net profit fell 76.2 per cent year on year (Y-o-Y) to Rs 309 crore due to a sharp increase in provisions for stressed loans — or credit costs — and erosion in net interest income. They had posted a net profit of Rs 1,300 crore in Q1FY25.

 

Sequentially, net profit shrank 46.1 per cent from Rs 573 crore in the quarter ended March 2025 (Q4FY25), according to data compiled by the BS Research Bureau for