Suryoday SFB Q4 FY26: Advances, Deposits rise 30%

What Suryoday SFB reported for Q4 FY26

Suryoday Small Finance Bank (Suryoday SFB) reported a strong business update for Q4 FY26, led by higher loan growth, faster deposit mobilisation, and an improvement in reported asset quality ratios. The bank said gross advances rose to ₹13,201 crore, while total deposits increased to ₹13,958 crore. The update also highlighted healthy collection metrics for the quarter, with EMI collection efficiency at 98.2% and overall collection efficiency at 99.5%.

Alongside the business growth, the bank flagged progress on digital channels and product adoption, including digital deposits of about ₹1,867 crore and credit-line on UPI crossing 5 lakh customers. The quarter’s update matters because it combines balance sheet expansion with improving headline GNPA ratios, at a time when microfinance-linked stress has been referenced as a profitability headwind in other recent disclosures.

Advances growth and disbursements momentum

The bank said gross advances reached ₹13,201 crore in Q4 FY26, up 29% year-on-year. Disbursements in Q4 FY26 were ₹3,077 crore, which was reported as a 46% year-on-year increase. These numbers signal continued momentum in loan growth through the quarter.

In a separate disclosure for Q1 FY26 (quarter ended June 2025), Suryoday SFB reported gross advances of ₹10,846 crore, up 20.0% year-on-year versus ₹9,037 crore as of June 2024. For the same Q1 FY26 period, disbursements were reported at ₹2,261 crore, up 30% year-on-year from ₹1,740 crore. Taken together, the disclosed figures point to sustained origination activity across quarters, though they are presented for different reporting cut-offs.

Deposit base expands, with CASA growth

On liabilities, Suryoday SFB reported total deposits of ₹13,958 crore in Q4 FY26, up 32% year-on-year. CASA deposits rose 42% to ₹3,141 crore in the same quarter, indicating faster growth in low-cost balances relative to overall deposits.

For Q1 FY26 (as of June 2025), deposits were reported at ₹11,312 crore, up 39.0% year-on-year compared with ₹8,137 crore as of June 2024. Management also disclosed a CASA ratio of 17.7% for that period and said CASA in value grew by 39.5% year-on-year, describing it as granular and retail-focused.

Digital deposits and UPI credit-line traction

Suryoday SFB reported digital deposits of approximately ₹1,867 crore as part of the Q4 FY26 update. The bank also said credit-line on UPI surpassed 5 lakh customers, pointing to expanding adoption of digital credit-led payment rails.

Management has also referenced “deepening of digital distribution channels” as one of the drivers of deposit growth in Q1 FY26. The disclosures position digital acquisition as a supporting lever for retail liability growth, alongside physical network expansion and product diversification.

Asset quality and collections: GNPA improves in Q4 FY26

On asset quality, the bank reported a gross non-performing assets (GNPA) ratio of 6.5% in Q4 FY26, improving from 7.2% in Q4 FY25. It also reported net non-performing assets (NNPA) at ₹547 crore.

Collections were highlighted as a key operating metric in the quarter. EMI collection efficiency (CE) was reported at 98.2% in Q4 FY26, while overall collection efficiency was reported at 99.5%. In Q1 FY26, the bank reported current bucket collection efficiency at 98.3% and “collection efficiency (1 EMI adjusted)” at 86.4%, versus 94.8% in Q1 FY25, attributing the change primarily to the Inclusive Finance portfolio.

Inclusive Finance portfolio and CGFMU cover

The bank said about 98% of the Inclusive Finance portfolio is covered under the CGFMU Scheme. This is a significant detail because it frames the bank’s credit protection approach in a segment that has been discussed in relation to collection behaviour and credit costs.

In management commentary for Q1 FY26, Suryoday SFB said the microfinance sector’s stress continued to weigh on net interest income (NII) and credit costs, impacting profitability for the quarter. The bank also said improved collection efficiency in Inclusive Finance and the strength of its diversified portfolio, especially secured retail and MSME, support its positioning for improved performance going forward.

Profitability indicators show pressure in recent periods

Despite business growth, profitability metrics cited in the provided disclosures show moderation. The profit numbers referenced include ₹68.47 crore for TTM, ₹115 crore for March 2025, and ₹216 crore for March 2024.

For Q1 FY26, the bank reported total income of ₹355.8 crore, down 2.1% year-on-year from ₹363.4 crore. NII was reported at ₹247.1 crore, down 15.7% year-on-year from ₹293.2 crore. Pre-provision operating profit (PPOP) was reported at ₹108.9 crore versus ₹144.3 crore, a 24.5% decline year-on-year. Profit after tax (PAT) for Q1 FY26 was ₹35.3 crore versus ₹70.1 crore in Q1 FY25.

The cost metrics also moved higher in the cited quarter. Cost of funds was reported at 7.9% in Q1 FY26 versus 7.6% in Q1 FY25, while cost-to-income was 69.4% versus 60.3%.

Management commentary: portfolio mix shifting toward non-IF

Baskar Babu Ramachandran, MD and CEO, said the bank started Q1 FY26 with a positive note on growth, with gross advances at ₹10,846 crore and deposits at ₹11,312 crore as of June 30, 2025. He said the non-Inclusive Finance (non-IF) book crossed 52% of total advances, describing it as a structural shift in portfolio mix.

He linked this shift to growth in retail secured assets, especially mortgages and wheels segments, and also cited early traction in MSME lending. The bank said it aims to continue focusing on individual loans (Vikas Loan) within Inclusive Finance while diversifying the asset mix, strengthening deposits, and leveraging digital platforms.

Key numbers at a glance

Market impact: what investors typically track from here

The Q4 FY26 update provides operating indicators that investors in small finance banks often track closely: loan growth, deposit traction, CASA build-up, and collection efficiency. In Suryoday SFB’s case, the quarter’s data shows expansion in both sides of the balance sheet and an improvement in the GNPA ratio compared with the year-ago quarter.

At the same time, profitability-related disclosures for Q1 FY26 highlight pressure from lower NII, higher cost ratios, and weaker PAT year-on-year, which the bank linked to microfinance sector stress and credit costs. For market participants, the link between collection efficiency trends in Inclusive Finance, portfolio mix changes toward secured retail and MSME, and the pace of deposit re-pricing (via cost of funds) remains central to interpreting upcoming results.

Conclusion

Suryoday SFB’s Q4 FY26 business update points to strong growth in advances and deposits, rising CASA balances, and improved GNPA compared with Q4 FY25, supported by high collection efficiency metrics. Recent profitability numbers cited for Q1 FY26, however, indicate that earnings remained under pressure due to NII and cost movements amid sector-wide microfinance stress. The next set of financial results and management commentary will be key to tracking whether improving collections and a rising share of non-IF lending translate into steadier profitability through FY26.