Fino Payments Bank FY26 profit falls 43% as deposits rise

Key takeaway for investors

Fino Payments Bank reported a sharp drop in profitability in FY26 even as it continued to scale its deposit franchise and customer base. FY26 net profit fell 43% to ₹52.46 crore, while Q4 net profit declined 70% to ₹7.10 crore, with the bank pointing to regulatory headwinds and a contraction in its digital business. At the same time, deposits touched a record ₹2,957 crore and the bank said its Small Finance Bank (SFB) transition remains on track, with a stated target of 20% ROE by FY30. The operational update also included a key technology milestone: completion of core banking system (CBS) migration to Finacle, following an investment of about ₹200 crore.

What the bank reported in FY26 and Q4

The FY26 profit numbers stood out because they moved in the opposite direction to some operating indicators such as deposits and new accounts. FY26 net profit was reported at ₹52.46 crore, a 43% decline compared with the previous year. For Q4, net profit came in at ₹7.10 crore, down 70% year-on-year, as the bank described an environment shaped by regulatory pressures and weaker digital business contribution. In an earlier quarter reference included in the update stream, the bank had also reported Q3 FY26 net profit of ₹12.25 crore, alongside total income from operations of ₹394.41 crore, both lower year-on-year.

Deposits hit record highs as CASA accounts rose

The deposit franchise was the main positive in the bank’s quarterly business commentary. Record deposits were reported at ₹2,957 crore, and separate Q4 updates cited deposits at ₹2,950-plus crore in March 2026. Customer acquisition remained steady, with around 7 lakh new accounts opened during Q4 FY26, taking the total customer base to about 1.75 crore accounts. March 2026 alone accounted for around 3.13 lakh new accounts.

The bank also pointed to growth in digitally active customers, reported at nearly 60 lakh, and an increase in renewal income, which is typically linked to account stickiness. Q4 FY26 renewal income was reported at a record ₹62.2 crore for the quarter. In Q3 FY26, renewal income was reported at ₹57 crore, up 19% year-on-year, alongside an average CASA balance of ₹1,314.

Loan referral momentum built through partner disbursements

Beyond deposits, the loan referral business was positioned as an important contributor as the bank moves toward an SFB model. In a March 25, 2026 update, the bank said Q4 FY26 referral loan disbursements reached ₹540 crore as of March 20 and were expected to close at ₹630 crore. That expected Q4 run-rate was described as around 90% of the first nine months’ cumulative disbursements of ₹700 crore.

For the full year, the bank said it was on track to reach around ₹1,300 crore in total FY26 referral loan disbursements. The update linked demand to rural credit needs and the bank’s merchant-led distribution, citing a merchant network of about 20 lakh and partnerships with NBFCs focused on secured lending products.

Digital and transaction businesses moderated amid regulatory focus

While deposits and referrals grew, the bank flagged weakness in transaction-led lines. The transaction business (remittance, micro ATM and AePS) declined about 30% quarter-on-quarter, attributed to muted activity in January and February, with recovery observed in March 2026. Digital payment services moderated by around 25% quarter-on-quarter, which the bank linked to a calibrated approach toward merchant quality and risk management and the impact of recent developments.

A separate operational note in the same information flow said the UPI P2M business has been paused for a comprehensive review. The combined picture suggests the bank is prioritising risk controls and compliance outcomes, even if that temporarily reduces throughput or fee-linked activity.

Finacle CBS migration completed after ~₹200 crore investment

On the technology front, Fino Payments Bank reported it completed migration to the Finacle core banking system, following an investment of about ₹200 crore. The update dated April 16, 2026 highlighted this milestone as a significant operational step. For a branchless, merchant-led bank, the CBS layer is critical for deposit servicing, product readiness, and scalability, particularly if the bank transitions into an SFB structure over time.

SFB transition: stated targets and operating plans

The bank reiterated that its SFB transition remains on track and flagged a target of 20% ROE by FY30. In the same set of management commentary, the bank outlined longer-term balance sheet and business aspirations, including a loan book ambition of ₹8,000-₹10,000 crore by FY30. It also stated an expectation that the credit-deposit ratio could be around 75% in the initial 3-4 years of the build-out.

On liabilities, the bank highlighted the importance of low-cost deposits. It referenced CASA-based liabilities of over ₹2,500 crore, and deposits with other banks of about ₹500 crore, implying nearly ₹3,000 crore of low-cost deposits in aggregate. It also said it expects the current business, along with growth, to contribute about 75% of overall revenue by FY30.

Market snapshots and reported price move

Following the Q4 business update, Fino Payments Bank’s stock was reported to have opened at ₹127.49 on April 7, 2026, touched an intraday high of ₹132.34, and was cited as rising 2.87% to ₹127.30 during the morning session. These numbers were presented alongside the Q4 operating update highlighting deposits, new accounts, renewal income and loan referral momentum.

Summary table: reported metrics at a glance

Why this update matters

The FY26 picture reflects a bank balancing three priorities at once: protecting compliance and risk standards amid regulatory scrutiny, sustaining deposit-led growth, and building new revenue engines through referrals and renewal income. The profit decline indicates near-term pressure, but deposit and account growth show the franchise is still adding customers and balances. How quickly the bank stabilises digital payments and transaction throughput, while keeping risk filters tight, will remain central to the operating story.

Conclusion

Fino Payments Bank’s FY26 update combined a sharp profit decline with record deposits, strong account additions, and accelerating loan referral disbursements. The bank has also completed its Finacle CBS migration at an investment of about ₹200 crore and reiterated SFB transition goals, including a 20% ROE target by FY30. Near-term attention is likely to remain on the ongoing review of UPI P2M and on how transaction and digital payment moderation evolves in subsequent quarters, alongside the bank’s formal financial results disclosures.