Suryoday Small Finance Bank - Cost Leadership To Ensure Better Profitability: ICICI Securities
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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:
revamped business architecture with separate collection team,
stringent credit underwriting, and
focus on small-ticket secured loans in segments like small commercial vehicle, affordable housing, etc.
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