Suryoday Small Finance Bank – Q2 Provisional Business Update

Executive Summary Suryoday Small Finance Bank Ltd. has reported its provisional and unaudited business update for the quarter ended September 30, showcasing robust operational momentum and a material improvement in asset quality. The bank delivered a balanced ~35% year-on-year (YoY) growth in both advances and deposits, reflecting strong franchise expansion and stable liquidity management. Business Growth & Momentum Credit Expansion: Gross advances expanded by 34.6% YoY and 4.2% quarter-on-quarter (QoQ) to ₹14,972 crore, achieved even after accounting for a write-off of ₹591 crore. Disbursements: The quarter witnessed healthy credit demand, with total disbursements rising 27.4% YoY and 4.8% QoQ to ₹3,095 crore. Liability Franchise: Total deposits surged 35% YoY and 10.6% QoQ to reach ₹16,184 crore. Retail deposits continue to anchor the funding base, growing 32.5% YoY to ₹13,670 crore, while bulk deposits increased by 50.1% YoY to ₹2,514 crore. CASA: Current Account Savings Account (CASA) deposits grew by 26.8% YoY and 2.3% QoQ to ₹3,142 crore, indicating a stable low-cost funding trajectory. Collection Efficiency: Repayment metrics remained highly resilient. Current-bucket collection efficiency stood at 99.1%, and one-EMI collection efficiency was robust at 97.7% as of September 30. Provisions & Coverage: The bank holds provisions of ₹135.77 crore. As part of its prudent risk management, it continues to cover its eligible portfolio under the Credit Guarantee Scheme, with ₹180 crore claimable under the CGFMU. Market Reaction Reacting to the robust business update, investor sentiment was notably positive. The stock jumped up to 4.6% in intraday trade before stabilizing with moderate gains. While the stock has posted a positive 2% return year-to-date, it continues to trade below its IPO issue price of ₹305 per share, presenting a potential area for value realization as asset quality continues to normalize.