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Airtel Payments Bank set to break even this financial year, details

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Airtel Payments Bank (APB) is ready to break even in this fiscal , having notched up heavy revenue growth in the last fiscal and also turned contribution positive, resulting revenue fully covered variable costs, stated by a senior organization executive.

Covid-19 is a massive growth driver for Bharti Airtel’s payments banking arm, he said, as the users want banking solutions closer to their residence and also want convenient and more reliable digital payment options.

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“Airtel Payments Bank is confident of breaking even this year, helped by the growing scale of its model that leverages deep distribution backed by investments in digital infrastructure,” an executive told on condition of anonymity.

The organization recorded 32% year-on-year revenue increase to Rs 627 crore, and its services were a main reason for lessening mobile subscriber churn for parent Bharti Airtel, as told by company insiders. Airtel’s monthly user churn dropped to 2.2% in the quarter to March from 2.6% a year .

“APB has taken another giant leap towards profitability this year,” managing director Anubrata Biswas quoted, additionally saying that the amalgamation of its brand and innovative products by distribution reach and technology positions it would accelerate growth further.

In December 2020, Bharti Enterprises chairman Sunil Mittal had stated that Bharti Airtel might upgrade its payments bank licence to a small finance bank at a point to enter the lending business and impress larger deposits.

If that happens, it will be allowed to access deposits from its 55 million customers more profitably, said industry executives.

A payments bank can give services such as remittances, savings accounts, remittances and other payment options, but recent regulations do not permit it to lend money. Example , ABP now offers digital payments and money transfers with value-added products like direct benifit, insurance, transfer credits, Aadhaar-enabled payment systems and pension schemes.

Organization executives did not, however, comment on specific time frames to convert APB into a small finance bank.