Suryoday Small Finance Bank - Cost Leadership To Ensure Better Profitability: ICICI Securities

Customers count Indian rupee banknotes while sitting in a store (Photographer: Dhiraj Singh /Bloomberg)

Suryoday Small Finance Bank - Cost Leadership To Ensure Better Profitability: ICICI Securities

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Suryoday Small Finance Bank Ltd. is among the leading small finance banks in India in terms of profitability – delivering more than 2% return on asset in FY19-FY20, supported by cost efficiency (cost / assets at less than 5.5% in FY21) and higher net interest margins.

Strong business growth with advances / deposits delivering 39% / 63% compound annual growth rate between FY18-FY21, even during the transition phase, and ~80% retail deposits as at March 2021 speaks of superior execution.

Though the bank’s retail asset journey has gone through its learning curve, better-quality growth is likely in the foreseeable future, driven by:

  1. revamped business architecture with separate collection team,

  2. stringent credit underwriting, and

  3. focus on small-ticket secured loans in segments like small commercial vehicle, affordable housing, etc.

Click on the attachment to read the full report:

ICICI Securities Suryoday SFB Initiating Coverage.pdf

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