Equitas Small Finance Bank reported a mixed bag of fourth quarter numbers.

Throwing further light on the quarterly performance and outlook going forward PN Vasudevan, managing director and CEO of Equitas Small Finance Bank, said the contraction on net interest margins seen in the quarter was due to reduction in yields.

In Q4, there are usually many holidays in January and so microfinance business slows down and in March this year there was slowdown in microfinance and small business loans due to code of conduct announced in different parts of the country, said Vasudevan, adding that this slowdown in disbursements impacted spreads, which were down by 50 basis points between Q3 and Q4.

The contraction in spreads going forward is expected to be offset by reduction in operating expense and NPAs, he said.

Talking about the strong loan growth, he said the growth is spread across products and across geographies. “If you see our asset mix, we have microfinance at 25 percent, commercial vehicle at 25 percent, small business loan at 40 percent and new products at 10 percent — we have range of products which address their own markets for growth.”

He is confident of disbursement growth to be around 35-40 percent annual growth and the only challenge would be that of asset quality. However, as long as they have control over asset quality, growth would continue, he said.

Giving update on the listing, reverse merger and whether there would be any dilution, he said, they are required to list the bank within 3 years, which is by September this year but there is a process and right now they are waiting for the first level approval.