Yield compression from rate cuts
Management acknowledged that disbursement yields may decline due to the overall interest rate scenario, which could offset NIM gains from lower cost of funds.
EQUITASBNK / Q3-FY26 / risks
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Equitas Small Finance Bank · Material risks, their source context, and severity in the latest available quarter.
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Material risks this quarter
medium
Elevated cost-to-income ratio
Despite improvement, cost-to-income remains high at 72% (70% ex-labor code), and management expects it to decline only gradually to 65% by FY27 exit.
Capital adequacy pressure from growth
An analyst raised concerns about capital adequacy; management plans to conserve capital via IBPC, CGTMSE, and gold loans, but may need to raise capital in H2 FY27.
Geographic concentration in South India
An analyst noted that ~62% of advances are in South India; management plans to reduce Tamil Nadu exposure from 44% to 36% over 3-4 years, but near-term concentration risk remains.