Fino Payments Bank, a key player in India’s digital banking sector, has reported a marginal increase in its net profit for Q3FY25, reaching ₹23.1 crore compared to ₹22.8 crore in the same period last year. The modest growth comes despite a significant 21% year-on-year increase in net revenue, highlighting the impact of new tax obligations on the bank’s bottom line.
The bank’s performance in the third quarter demonstrates resilience in its core business operations, with net revenue climbing to ₹148 crore from ₹122 crore in the corresponding quarter of the previous fiscal year. This revenue growth reflects the continuing expansion of digital banking services and financial inclusion efforts in Tamil Nadu and across India.
A notable aspect of the financial results is the bank’s profit before tax, which showed a robust 25% year-on-year increase to ₹28.5 crore, up from ₹22.8 crore. However, the introduction of a tax expense of ₹5.34 crore in the reporting quarter, compared to zero tax liability in the same period last year, has significantly moderated the final profit figures.
“The consistent growth in our revenue numbers, particularly the 21% increase in net revenue, underscores the strength of our business model and our commitment to financial inclusion,” said a senior executive from Fino Payments Bank. “While tax expenses have impacted our net profit growth, the underlying business fundamentals remain strong.”
For Tamil Nadu’s growing fintech ecosystem, Fino’s performance offers several insights. The bank’s ability to maintain profitability while managing increased regulatory obligations demonstrates the maturity and resilience necessary for success in the financial services sector. This could serve as a valuable case study for local fintech startups navigating similar challenges.
The results also highlight the evolving nature of the payments bank model in India. Despite regulatory constraints on lending and deposit limits, Fino’s ability to grow its revenue significantly suggests there are still substantial opportunities in the digital banking space, particularly in underserved markets.
Looking ahead, the introduction of tax expenses signals a new phase in the company’s growth journey. While this may impact short-term profit growth, it also indicates the business has reached a scale where it contributes to the government’s tax revenue, marking an important milestone in its maturation.
For Tamil Nadu’s startup ecosystem, particularly those in the fintech space, Fino’s experience offers valuable lessons about sustainable growth, regulatory compliance, and the importance of building robust revenue streams. The state’s entrepreneurs can learn from how Fino has balanced growth with profitability while adapting to changing regulatory requirements.
