Elevated opex, NIM compression impacted earnings; lower credit cost at <1% helps co sustain RoA of >2% in Q1FY24
Equitas Small Finance Bank (Equitas) has sustained >2% RoA for the 3rd consecutive quarter despite >30bps QoQ NIM compression and >5% QoQ increase in cost-income ratio to 66% in Q1FY24. Earnings were primarily boosted by lower credit cost, which settled at ~80bps in Q1FY24 vs 190bps in Q4FY23, reflecting robust credit environment.