Fino Payments Bank, a leader in digital banking for India’s mass market, is gearing up for a strong FY26. After closing FY25 with robust numbers and its fifth consecutive year of profit, the bank is now betting big on expanding its CASA base and UPI-driven digital payments to drive a 20-25% jump in revenue.
Strong FY25 Performance Sets the Stage
Fino Payments Bank posted a net profit of ₹92.5 crore in FY25, marking a 7% year-on-year rise. The bank’s total revenue soared 25% to ₹1,847 crore, in line with its guidance and powered by a sharp uptick in digital transactions and strategic focus on high-margin products like CASA and cash management services. The bank’s profit before tax (PBT) grew 26% to ₹108.3 crore, highlighting operational efficiency even as tax liabilities increased after becoming a tax-paying entity in Q2 FY25.
Digital Transactions: The Growth Engine
Digital banking is now at the heart of Fino’s strategy. In FY25, the bank processed over ₹4.6 lakh crore in transactions, with digital throughput alone contributing ₹2.25 lakh crore-a massive 70% jump from last year. UPI volumes shot up 80% year-on-year to 288 crore, and digital payment services now account for 27% of the bank’s revenue, up from just 9% a year ago.
Fino’s UPI market share grew from 1.27% in Q4 FY24 to 1.62% in Q4 FY25, cementing its position as a digital-first bank. The upcoming launch of a UPI-based bulk payment product, “Payout,” in Q2 FY26 aims to deepen the bank’s B2B digital footprint, especially among corporate clients making high-volume payments.
CASA Expansion: Targeting Middle India
CASA (current and savings account) products remain a key revenue driver. FY25 saw a 37% rise in average deposits to ₹1,849 crore and a 48% jump in CASA renewal income to ₹190 crore. Fino’s “Gullak” product, tailored for MSME employees and blue-collar workers, has seen strong annuity income, with 65% of customers renewing into subsequent years.
For FY26, Fino is rolling out new CASA offerings aimed at customers with higher average balances (₹5,000 and above), especially in tier II and III cities. The goal is to move slightly upmarket, targeting middle-income customers while deepening penetration in existing geographies rather than expanding to new locations.
Technology and Customer Ownership Model
Fino continues to invest in technology, with a planned capex of ₹90-100 crore for FY26 after spending ₹165 crore on core banking migration in FY25. The bank is transitioning from a transaction-focused model to a customer ownership approach, with 65% of new customers becoming digitally active. This shift is expected to boost recurring revenue streams and customer loyalty.
Transition to Small Finance Bank on the Horizon
A major development in FY26 will be Fino’s transition to a small finance bank (SFB), pending regulatory approval. This move will enable lending capabilities, diversify revenue streams, and leverage its strong distribution network and digital infrastructure. The SFB model will focus on customer deposits, limited physical branches, and selective fintech partnerships, with continued investment in technology.
FY26 Outlook: Steady Margins, Focused Growth
- Revenue Growth Target: 20-25% increase in top line for FY26.
- Profitability: PBT margin expected to remain flat at 5.9%; cost-to-income ratio to stay near 25%.
- Digital Focus: Continued push on UPI and digital B2B products.
- CASA Expansion: New products for higher-balance, middle-income customers.
- SFB Transition: Strategic move to unlock lending and new services.