Q3 FY26 profit tumbles to INR 12.3 Cr amid decline in transaction revenues, even as digital throughput and core banking upgrades point to long-term bets.
Fino’s Q3 Profit Nosedives Despite Operational Wins
Fino Payments Bank reported a 47% year-on-year drop in net profit to INR 12.3 Cr for the December 2025 quarter (Q3 FY26), down from INR 23.1 Cr a year ago. The sequential decline was also sharp—20% lower than last quarter’s INR 15.4 Cr.
- Total income for the quarter stood at INR 394.4 Cr, a 15% YoY and 2% QoQ decline.
- The bank cited a slump in its traditional transaction business as the main drag on revenue.
- An exceptional expense of INR 3.1 Cr also weighed on earnings.
Is the digital pivot enough to offset pressure from its core revenue stream?
Transaction Revenues Sink; Treasury & Retail Hold Firm
Fino’s business mix reflected both strengths and cracks:
- Revenue from other banking operations—its largest contributor—fell 33% YoY to INR 202.9 Cr.
- Retail banking brought in INR 128.2 Cr (+22% YoY), and treasury income rose to INR 63.3 Cr (+28% YoY).
While traditional income drivers softened, the bank’s earnings before interest, taxes, depreciation, and amortization (EBITDA) offered some cushion:
- EBITDA grew 6% YoY to INR 63.9 Cr.
- The EBITDA margin hit a record 16.2%, up 300 basis points from last year.
- Operating expenses (excluding provisions) increased 13% YoY to INR 373.9 Cr.
Can stronger treasury and retail arms balance the dip in its legacy cash cows?
Digital Growth Accelerates Amid Infrastructure Overhaul
Despite the profit slump, Fino continued to expand its digital and customer footprint aggressively.
- Digitally active customers surged 22% YoY to nearly 60 lakh.
- Digital throughput rose 12% YoY to INR 66.1K Cr, reflecting higher usage across payments and merchant transactions.
- CASA base expanded to 1.68 Cr customers, driven by both assisted and digital channels.
The bank also went live on Infosys’ Finacle core banking platform—a move set to boost system stability, product rollout, and future lending capabilities.
How far can tech upgrades push profitability in a volume-driven banking model?
Gears Up for Small Finance Bank Transition
In a strategic milestone, Fino received in-principle approval from the RBI to transition into a Small Finance Bank (SFB).
CEO Rishi Gupta emphasized this as a “pivot moment,” pointing to the role of digital in strengthening the bank’s ‘phygital’ model—a blend of physical presence and digital agility.
“The Finacle migration is our first step towards building a digital-first and customer-centric bank,” said Gupta.
The move is expected to unlock access to a wider lending portfolio and deposits—a much-needed growth lever.
TL;DR
Fino Payments Bank’s Q3 FY26 profit slumped 47% YoY to INR 12.3 Cr due to a sharp drop in its transaction business. Despite the hit, EBITDA improved and digital usage surged. The bank also received RBI’s nod to become a small finance bank, backed by tech upgrades and growing digital throughput.
AI summary
- Net profit fell 47% YoY to INR 12.3 Cr
- Total income dropped 15% YoY to INR 394.4 Cr
- Revenue from traditional banking ops down 33%
- EBITDA margin rose to record 16.2%
- RBI approved transition to Small Finance Bank
