Elevated credit costs in FY27
CFO acknowledged that backlog provisioning on NPA stock will continue through FY27, keeping credit costs above steady-state 2%.
ESAFSMALLFINANCEBANK / Q4-FY26 / risks
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ESAF Small Finance · Material risks, their source context, and severity in the latest available quarter.
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Material risks this quarter
medium
NIM compression from secured shift
As the bank shifts to secured lending (lower yields), NIM may trail loan growth; management guided NIM around 7% plus/minus 0.5%.
Execution risk in digital transformation
Core banking upgrade (Bank 2.0) is expected to complete by Q3 FY27; delays could impact operational efficiency.