Slice Small Finance Bank records maiden profits in H1 FY26

Slice Small Finance Bank (SSFB), formed after the merger of fintech Slice and North East Small Finance Bank, has reported its first profit since the amalgamation. The lender posted a net profit of Rs 7 crore for the first half of FY26, marking a turnaround from a loss of Rs 217 crore in FY25 and Rs 153 crore in FY24, according to CRISIL’s latest rating report.

During the April–September 2025 period, SSFB’s pre-ESOP profit stood at Rs 43 crore, of which Rs 36.5 crore was transferred to the employee stock option reserve. CRISIL noted that the bank’s profitability was better than anticipated, aided by net interest margins of 11.1% (annualised) and credit costs of 2.4%, even as the cost of funds rose slightly due to legacy high-cost borrowings inherited from North East Small Finance Bank.

According to the report, the bank’s assets under management (AUM) jumped to Rs 3,759 crore as of September 2025 from Rs 2,954 crore in March 2025, showing rapid growth after the merger became effective in October 2024. 

The portfolio mix remained dominated by digital unsecured personal loans, which accounted for about 76% of AUM, followed by MSME loans (14%) and other lending categories. Deposits also saw strong traction, which rose 61% in H1 FY26 to Rs 3,896 crore, with a healthy CASA ratio of 27.5%, up from Rs 2,418 crore at the end of FY25.

In line with this improved performance, CRISIL revised its outlook on the bank’s Lower Tier-II bonds to ‘Positive’ from ‘Stable’, reaffirming the rating at BBB-. The agency said “the outlook revision reflects SSFB’s strengthening market position, improved profitability, and adequate capitalisation”. As of September 2025, the lender’s capital adequacy ratio stood at 18.1%, supported by a net worth of Rs 891 crore, compared to Rs 849 crore in March 2025.

While asset quality remains modest, its gross NPAs declined to 5.8% and net NPAs to 4.2%, down from 6.3% and 4.7% in FY25. CRISIL cautioned that the bank’s ability to sustain its profitability and maintain stable asset quality as it scales operations will be a key rating sensitivity going forward.