Telenor Microfinance Bank/Easypaisa has claimed to reduce its losses by more than 90 percent in the first quarter of 2023 (1QCY23) as compared to a similar period of the last year, mainly due to equity injection made by its sponsors and revenue growth through its branchless banking arm.

According to financial results, the leading microfinance bank has reduced its pre-tax losses to Rs. 185 million in the first quarter of 2023 as compared to Rs. 2.185 billion reported in a similar period of the last year.

The microfinance bank’s revenue surged by 353 percent to Rs. 1.25 billion during January-March 2023 as compared to Rs. 277 million in the corresponding period last year.

Other income of the company improved by 18 percent to Rs. 63 million in 1QCY23 from Rs. 53 million in 1QCY22. Similarly, Easypaisa’s float income jumped by 116 percent to Rs. 1.58 billion during the period in review.

Its earnings before interest, taxes, depreciation and amortization (EBITDA) turned positive at Rs. 227 million this year as compared to Rs. 1.76 billion losses reported in 1QCY22. Meanwhile, the bank’s markup expense decreased by 51 percent to Rs. 215 million during the quarter. Conversely, operating expenses surged by 12 percent to Rs. 3.54 billion during the period in review.

Easypaisa incurred an exchange loss of Rs. 316 million during 1QCY23, up 281 percent from last year’s Rs. 83 million.

The bank disbursed 20,000 digital loans per day during January-March 2023. As of March, total productive lending revenue surged by 27 percent, while the treasury income of the company improved by 116 percent.

Over the period, the bank’s sponsors threw behind strong financial support with consistent equity injection. The sponsors of the bank invested $33 million in 2023 alone. Overall, the bank received a whopping amount of $304 million on account of an equity injection from its shareholders. This year, the sponsors have committed to investing an amount of $15 million in the bank which will likely turn its balance sheet into green.

The microfinance bank has engaged consultants for pursuing its target, preparing a transition plan including legal and operational phases which will be submitted to the banking regulator by June 2023 for approval as per process. The conversion shall entail the grant of the Digital Retail Bank license which shall replace the existing Microfinance Bank license.

Source: Pro Pakistani